Resident Alien vs. Nonresident Alien

1. What’s the Difference?

Feature Resident Alien Last Name
Tax status Taxed like a U.S. citizen on worldwide income Taxed only on U.S.-source income (with limited deductions)
Forms used Files Form 1040 Files Form 1040-NR
Can I claim standard deduction? Yes No (except Indian students under tax treaty)
Can I file jointly with my spouse? Yes (if spouse is resident alien or elects to be) No (unless special election is made)
Eligible for tax credits (e.g., child tax credit)? Yes (if requirements met) Mostly no
Must report foreign bank accounts (FBAR)? Yes Usually no
Subject to FATCA rules? Yes No

2. How Do You Know Which One You Are?

You are a Resident Alien if you pass either of these two tests:

Green Card Test

  • You have a U.S. lawful permanent resident card (a "Green Card")


Substantial Presence Test

  • You were physically in the U.S. for:
  • At least 31 days in the current year, and
  • 183 days over the last 3 years, calculated as:
  • All days in current year
  • × 1
  • Days in prior year
  • × 1/3
  • Days in 2nd prior year
  • × 1/6


Certain visa types (F, J, M, Q) may be exempt from counting days.

3. Can You Change Your Status?

Yes. For example:

  • A nonresident alien may become a resident alien once they pass the Substantial Presence Test or get a Green Card.
  • Some taxpayers can make an election to be treated as resident aliens for tax purposes (e.g., married couples).

4. Why This Matters

  • Resident aliens have more tax obligations — but also more tax benefits.
  • Nonresident aliens pay tax only on U.S.-source income, usually at fixed rates (e.g., 30% on dividends unless reduced by tax treaty).
  • Filing the wrong form (1040 vs 1040-NR) can cause delays, penalties, or IRS issues.

Example Scenarios:

Person Resident AlStatusien Why
Ana, a Spanish citizen, is on an H-1B visa in the U.S. for 250 days this year Resident Alien Passed Substantial Presence Test
Tom, a German student on an F-1 visa, in U.S. 4 years Resident Alien F-1 exemption ends after 5 years; now he counts days
Lisa, a UK citizen, earns U.S. income from a rental but lives abroad Nonresident Alien No U.S. presence; taxed only on U.S. rental income
Raj, Indian student in U.S. on F-1 visa, in year 2 Nonresident Alien Still within 5-year exemption

Summary Table:

Topic Resident Alien Nonresident Alien
Taxes on income Worldwide income Only U.S. income
Form used 1040 1040-NR
Standard deduction Yes No (few exceptions)
Tax treaty benefits Yes Still within 5-yeYes (if applicable)ar exemption
File jointly? Yes No (unless elect to treat as resident)