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Visitor I

Non-resident Alien Paying Resident Alien Taxes

Hi, 

 

for the past several years I've been a resident alien and have been filing taxes accordingly. This year (2018), I won't be in the US for more than 31 days and want to classify myself as a non-resident alien to maximize my returns. A few questions related to this:

 

1. Is it true that you have to be in the US for 31 days or more during the current year to pass the substantial presence test? or can you pass the test based on how long you've stayed in the previous 2 years despite not being in the US at all during the current year? 

 

2. Since my employer believes I am still a resident alien, my taxes are withheld accordingly from every paycheck. Should I update my tax status with HR now? or will my taxes be returned when I file them next April? 

 

3. In terms of income, I believe I'll make more than the minimum to benefit from filing taxes as a non-resident alien. But are there other considerations I need to weigh to determine the overall benefit of filing one way versus another? (e.g. proceeds from investments)

 

Thank you! 

1 Comment
Catalyst V

Non-resident Alien Paying Resident Alien Taxes

Being 31 days in the US during the tax year in question is a requirement to meet the Substantial Presence Test. I you do not meet that, you are a nonresident alien. Nonresident aliens are not necessarily taxed less. If you are sure that you will be a nonresident alien in 2018, you can provide HR with a new form W4 

https://www.irs.gov/forms-pubs/nonresident-alien-withholding-allowance-on-form-w-4-01-mar-2018

If you do meet the Substantial Presence Test, you would either be a resident alien for the entire year or be able to apply for an early residency termination date if you leave before the end of the year an then file a dual status return. Have a look at publication 519 https://www.irs.gov/publications/p519, but make sure to use the version for 2018 once it is published since there were major changes this year.