U.S. taxation of foreign nationals under the 1984 Tax Act: analysis and planning

• Published in: International tax journal Vol. 10; no. 6; pp. 433 - 443
• Main Author: Benson, David M
• Format: Journal Article
• Language: English
• Published: Riverwoods CCH INCORPORATED 01-09-1984
• Subjects: Aliens; Income tax; Income taxes; Internal Revenue Code; Migrant workers; Noncitizens; Nonresidents; Residents; Taxation; Taxes; Treaties; United States
• ISSN: 0097-7314

New planning opportunities may be available now that Congress has defined resident and nonresident aliens for tax purposes. Green card holders will be considered resident aliens from the time they receive the cards, until they give them up. Foreign individuals who enter the US as nonimmigrants will be considered US residents for tax purposes if they are present in the US for at least 31 days during the calendar year in question and if the sum of the days present in that year plus the last 2 years, under a special formula, is at least 183. Individuals who are not US citizens and are not considered US residents under these rules will be considered nonresident aliens. This plan provides certainty not available under previous law. Those who wish to remain nonresidents can arrange their plans so that they do not meet the 183-day test. Those who do meet it can plan for their classification as resident aliens.