U.S. Tax on Income of Aliens and Visa Holders, Investors, LPRs, Students-Dual Status Aliens

U.S. Tax on Aliens - Dual-Status Aliens Overview

You can be both a nonresident alien and a resident alien during the same tax year. This usually occurs in the year you arrive in or depart from the United States.

If you are a U.S. resident for the calendar year but you were not a U.S. resident at any time during the preceding calendar year, you are a U.S. resident only for the part of the calendar year that begins on the residency start date. You are a nonresident alien for the part of the year before that.

Dual Status aliens are taxed on their world-wide income for the part of the year that they are determined to be a resident alien. Income from sources outside the U.S. are taxable if received while a resident alien. For the part of the year that the dual status alien is a nonresident, he is taxed on income from U.S. sources and on certain foreign source income treated as effectively connected to a U.S. trade or business.

Dual-resident taxpayers who claim treaty benefits, must file a return by the due date (including extensions) using Form 1040NR or Form 1040NR-EZ, and compute your tax as a nonresident alien. They must also attach a fully completed Form 8833 if residency is determined under a tax treaty and income is received totaling more than $100,000.

Dual-Status Aliens - Choosing Resident Alien Status

If you are a dual-status alien, you can choose to be treated as a U.S. resident for the entire year if all of the following apply:

  • You were a nonresident alien at the beginning of the year.
  • You are a resident alien or U.S. citizen at the end of the year.
  • You are married to a U.S. citizen or a resident alien at the end fo the year.
  • Your spouse joins you in making the choice.

This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year.