How to Determine Starting Date & Ending Date for Residency ?

The US tax laws requires determination of period of residency of an alien in the United States. The rules for determining official starting date and ending date are different in various situations . These situations of Green Card Test , Substantial Presence Test ,First Year Choice ,Income Tax Treaty and

Residency Starting Date Under the Green Card Test

If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident (the date on which the United States Citizenship and Immigration Services (USCIS) officially approved your petition to become an immigrant).

Green card received outside USA

If you receive your green card abroad, then the residency starting date is your first day of physical presence in the United States after you receive your green card.

End date in case of green card

Your last day of presence in the United States as a lawful permanent resident of the U.S. is the residency ending date under the immigration laws of the United States.However, you are still considered to be a resident alien of the United States for U.S. income tax purposes, until you: (1) voluntarily turn in your green card to USCIS and renounce your U.S. immigrant status; (2) have your immigrant status administratively revoked by USCIS; or (3) have your immigrant status judicially revoked by a United States federal court.

Tax resident in two consecutive years

If you were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be considered a U.S. resident at the beginning of the current year.

Passed substantial presence test

If you pass the substantial presence test for a calendar year, the residency starting date is generally the first day you are present in the United States during that calendar year.

Ending Date Under the Substantial Presence Test

In general, if you meet the substantial presence test, your residency ending date is your last day of presence in the United States followed by a period during which:

  1. You are not present in the United States,
  2. You have a closer connection to a foreign country than to the United States, and
  3. You are not a resident of the United States during the calendar year following that of your last day of presence in the United States.

Under the general rule, the residency ending date is December 31 of the calendar year in which you left the United States.

However, your residency ending date is the last day during the calendar year that you are physically present in the United States if, for the remainder of the calendar year:

  • your tax home is in a foreign country (cf. Rev. Rul. 93-86); and
  • you maintain a closer connection to that foreign country than to the United States (cf. Treas. Reg. ยง 301.7701(b)-2(d)).

Passed green card test & substantial presence test

If you passed both the green card test and the substantial presence test in the same year, your residency starting date is the earlier of:

The first day you are present in the United States during the year you pass the substantial presence test, or

The first day you are present in the U.S. as a lawful permanent resident (green card holder).

First year choice

If you make the first-year choice, your residency starting date for the current year is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. You are then treated as a U.S. resident for the rest of the year.

If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period.

Residency in terms of an income tax treaty

In general, your residency starting date under the terms of an income tax treaty is the date on which you first satisfy the definition of a resident under the terms of the treaty. Generally, each treaty looks first to the domestic tax law of each country to define residency for that country. If dual residency in both countries results, then most treaties contain “tie-breaker” rules to determine a single country of residency.

Statement Required to Establish Your Residency Termination Date

You must file a statement with the IRS to establish your residency termination date. You must sign and date this statement and include a declaration made under penalties of perjury.

The statement must be attached to your income tax return. If you are not required to file an income tax return, send the statement to the Department of the Treasury, Internal Revenue Service, Austin, Texas 73301-0215, on or before the due date for filing your income tax return.

The statement must contain the following information (as applicable):

  1. Your name, address, U.S. taxpayer identification number (if any), and U.S. visa type and number (if any).
  2. Your passport number and the name of the country that issued your passport.
  3. The tax year for which the statement applies.
  4. The last day you were present in the United States during the year.
  5. Enough facts to establish that you maintained your tax home in and had a closer connection to a foreign country following your last day of presence in the United States during the year (or, if applicable, following the abandonment or rescission of your status as a lawful permanent resident during the year).
  6. The date that your status as a lawful permanent resident was abandoned or rescinded.
  7. Enough facts (including copies of relevant documents) to establish that your status as a lawful permanent resident has been abandoned or rescinded.
  8. If you can exclude days under the de minimis presence rule (refer to Publication 519, U.S. Tax Guide for Aliens), state the dates you are excluding and include enough facts to establish that you maintained your tax home in, and had a closer connection to, a foreign country during the period you are excluding.

Note: If you do not file the required statement, you cannot claim a closer connection to a foreign country or countries. This does not apply if you can show by clear and convincing evidence that you took reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements.

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