Substantial Presence Test
An individual who is not a U.S. citizen will be considered a U.S. resident for tax purposes and would file a 1040 if they meet the substantial presence test for the calendar year. To meet this test, they must be physically present in the United States on at least:
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31 days during the current year, AND
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183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
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All the days present in the current year, and
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1/3 of the days present in the first year before the current year, and
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1/6 of the days present in the second year before the current year.
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Example - Substantial Presence Test - A foreign individual, Maria, has been visiting the U.S. during the current and past two calendar years. For the current year (2022) Maria spent 112 days in the U.S, 119 days in 2021 and 136 days in 2020. She meets the first half of the test by being in the U.S. for at least 31 days in 2022. However, she does not meet the 183- day test (see below), and therefore must be treated as a non-resident for withholding and taxation purposes.
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| Year | Day | Multiplier | Test Days |
|---|---|---|---|
| 2022 | 112 | x1.0 | 112 |
| 2021 | 119 | x0.333 | 39.63 |
| 2020 | 136 | x0.167 | 22.71 |
| Total | 174.34 | ||
| Required 183, thus failed the test |
What Constitutes a Day
Generally, any portion of a day is considered a full day for purposes of this test. However, there are exceptions to this rule. Do not count the following as days of presence in the United States for the substantial presence test.
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Days the individual commutes to work in the United States from a residence in Canada or Mexico, if he or she regularly commutes from Canada or Mexico.
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Days in the United States for less than 24 hours, when in transit between two places outside the United States.
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Days in the United States as a crew member of a foreign vessel.
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Days the individual is unable to leave the United States because of a medical condition that develops while he or she is in the United States.
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Days the person is an exempt individual.
For details on days excluded from the substantial presence test for other than exempt individuals, refer to Pub 519, U.S. Tax Guide for Aliens.
Exempt Individual
Do not count days for which the individual is an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following categories who is exempt from counting days of presence in the U.S.:
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An individual temporarily present in the United States as a foreign government-related individual.
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A teacher or trainee temporarily present in the United States under a "J” or "Q” visa, who substantially complies with the requirements of the visa.
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A student temporarily present in the United States under an "F”, "J", "M", or "Q” visa, who substantially complies with the requirements of the visa.
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A professional athlete temporarily in the United States to compete in a charitable sports event.
If days of presence in the United States are excluded because the individual falls into a special category, a fully completed Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition, must be filed.
Closer Connection Exception to the Substantial Presence Test
Even if the substantial presence test is met the individual can avoid being treated as a U.S. resident if he or she is:
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Present in the U.S. on fewer than 183 days during the year, and
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Establishes that for the year, he has a tax home in a foreign country to which he has a closer connection than to the U.S.
To claim the closer connection exception, the taxpayer must include Form 8840, Closer Connection Statement, which must be attached to either the taxpayer’s 1040NR or 1040NR-EZ for the year. If the individual is not required to file for the tax year, the 8840 must be filed separately (follow the instructions for the 8840).
First Year of Residency - If an individual is a U.S. resident for the calendar year, but not a U.S. resident at any time during the preceding calendar year, he or she is a U.S. resident only for the part of the calendar year that begins on the residency starting date and is a non-resident alien for the part of the year before that date (Pub 519).