Resident Alien vs. Nonresident Alien
1. What’s the Difference?
Feature
Resident Alien
Nonresident Alien
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
Status
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
Yes (if applicable)
File jointly?
Yes
No (unless elect to treat as resident)