IRS: Substantial Presence Test

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The Internal Revenue Service applies a substantial presence test to determine whether a Non-Resident Alien will be considered a US Person due to the amount of days the person was present in the United States. The test is applied as follows:

  • If you were present in the United States for a minimum of 31 days during the current year, and
  • If you were present for a total of 183 days during the current year and the two previous years counting the days as follows:
    • All of the days in the current year
    • 1/3 of the days in the first preceding year
    • 1/6 of the days in the second preceding year

            If the total equals 183 days, then you will be considered a U.S. Person and be required to file a tax return in the United States. There are some limited exceptions that may apply. 

Example. Assuming the person has been in the U.S. a total of 120 days in 2012, 120 days in 2011 and 120 days in 2010:

            120 days will count towards the test in 2012

            40 days will count towards the test in 2011

            20 days will count towards the test in 2010

            Total equals 180 days, therefore you would be 3 days away from being considered a U.S. Person.


 

Topics:  IRS, Non-Resident Aliens, Substantial Presence Test

Published In: International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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