What Green Card Holders Need to Know When Filing Tax Return


The U.S. tax filing deadline is fast approaching on April 15, 2014. Green card holders often have a number of questions when it comes to tax obligations. As we explained in this recent post, green card holders are generally required to file a U.S. income tax return and report worldwide income no matter where they live. In an effort to assist green card holders with tax preparation, this article explains 7 things that green card holders need to know when filing a tax return:

  • As a permanent resident of the U.S., green card holders must file their income tax returns or request an extension by April 15 of each year.
  • It is very important that green card holders file their tax returns using a Form 1040 or a Form 1040-EZ. Green card holders should not file a tax return as a nonresident on a Form 1040NR even if all income was earned outside of the U.S. If a green card holder files as a nonresident, the green card holder can lose green card status.
  • In some cases, a green card holder may be a dual-resident taxpayer (a resident of both the U.S. and another country) and may claim the benefits of any applicable tax treaties between the countries. Dual-resident taxpayers who claim treaty benefits as a resident of another country need to file a return by April 15 (or the extension data if requested) using Form 1040NR or Form 1040NR-EZ. U.S. federal tax obligations should be calculated as a nonresident alien.
  • If income tax was paid or owed in another country, the green card holder can claim a foreign tax credit for such income in order to avoid double taxation.
  • If a permanent resident surrenders his or her green card, he or she must comply with nonresident alien requirements for filing a Form 1040NR, U.S. Nonresident Alien Income Tax Return.
  • If a foreign national is a lawful permanent resident of the U.S. in at least 8 of the last 15 tax years, he or she will be considered a long-term resident, in which case he or she may also be subject to expatriation tax if his or her green card is surrendered.
  • In some cases, a foreign nationals without a green card may also be required to file a tax return if he or she spends a significant amount of time in the U.S. each year. Specifically, a nonimmigrant visa holder will be required to file a nonresident tax return if he or she is present in the U.S. at least 31 days during the current year and 183 days during the three-year period that includes the current year and the two years immediately prior. A nonimmigrant visa holder may be exempt from U.S. tax obligations, however, if he or she is present in the U.S. less than 183 days in the current year, has not applied for a green card, has a closer connection with a foreign country, and maintains a home in this foreign country.

Topics:  Green Cards, Immigrants, Tax Returns

Published In: Immigration 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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