Resident Alien

Resident Alien

What is a resident alien?

A resident alien is a foreign-born person who legally resides in the United States but is not a U.S. citizen. In U.S. immigration and tax contexts, a person is treated as a resident alien if they either hold (or held in the previous calendar year) lawful permanent resident status (a green card) or meet the substantial presence test.

Key takeaways

• Resident aliens are noncitizen U.S. residents (green card holders or those who meet the substantial presence test).
• They are generally taxed like U.S. citizens on worldwide income and may claim foreign tax credits.
• Nonresident aliens are typically taxed only on U.S.-source income; different filing rules apply.
• USCIS recognizes three primary resident-alien categories: permanent, conditional, and returning residents.
• Certain temporary visitors (e.g., some students, teachers, government-related personnel) may be exempt from the substantial presence test.

How residency is determined

Residency for U.S. tax purposes is established by either:

Green card test
* You are a resident if you are a lawful permanent resident at any time during the calendar year (you have a current green card or had one in the prior calendar year).

Substantial presence test
* You meet this test if you are physically present in the U.S.:
* More than 31 days during the current year, and
* At least 183 days total computed over a three-year period using the formula:
* days in the current year + 1/3 of days in the prior year + 1/6 of days in the second prior year.

Exemptions
* Some visa categories and temporary government-related stays are exempt from counting days toward the substantial presence test (for example, certain students, teachers, researchers, and diplomatic staff). Exempt individuals may still be eligible to apply for adjustment of status.

Types of resident aliens (USCIS categories)

• Permanent resident: A green card holder with indefinite lawful permanent resident status.
• Conditional resident: Holds a two-year conditional green card (commonly based on marriage or certain investment programs); conditions must be removed before it expires.
• Returning resident: A lawful permanent resident returning to the U.S. after an extended absence; special readmission procedures may apply if outside the U.S. for more than a year.

Taxation differences: resident vs. nonresident aliens

Resident aliens
* File Form 1040 and generally must report worldwide income.
* May claim foreign tax credits to offset taxes paid to other countries.

Nonresident aliens
* File Form 1040-NR and generally report only U.S.-source income.
* Capital gains and other items have special rules; for example, capital gains by nonresident aliens are typically not taxed unless connected with a U.S. trade or business or the individual meets certain presence thresholds.

Practical steps and when to get help

• Determine your status each calendar year using the green card and substantial presence tests.
• Choose the correct tax form (Form 1040 for residents, Form 1040-NR for nonresidents).
• If your status is unclear or you face complex residency, tax, or immigration issues, consult USCIS guidance, the IRS, or an immigration attorney or tax professional.

Sources and further reading

• Internal Revenue Service — Substantial Presence Test; Topic No. 851, Resident and Nonresident Aliens; taxation guidance
• U.S. Citizenship and Immigration Services — Green Card; Conditional Permanent Residence; Reentry Permits
• U.S. Department of Homeland Security — Lawful Permanent Resident statistics