Counting your days: the substantial presence test
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- Blaga Veleva, EA
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- Tax residency
You are a U.S. tax resident for the year if you hold a green card or meet the substantial presence test: at least 31 days in the U.S. this year, and 183 days over three years counting all of this year's days, one third of last year's and one sixth of the year before. Blaga Veleva, EA, can check your dates and exemptions.
How does the substantial presence test work?
It counts days of physical presence. The IRS says you must be present "31 days during the current year," and "183 days during the 3-year period that includes the current year," counting all days in the current year, one third of the days in the first prior year, and one sixth of the days in the second prior year (IRS substantial presence test).
Example: 120 days this year, 120 last year and 120 the year before gives 120 + 40 + 20 = 180. That is under 183, so you do not meet the test this year.
Which days do not count?
Days as an "exempt individual" are left out. The IRS says "do not count days for which you are an exempt individual," and lists groups such as certain foreign government-related individuals, teachers and trainees, students, and professional athletes at charitable sports events, each under specific conditions (IRS). Days you were unable to leave the U.S. because of a medical condition or medical problem may also be excluded.
When do you need Form 8843?
Whenever you exclude days. Form 8843 is the "Statement for Exempt Individuals and Individuals with a Medical Condition" (IRS Form 8843), and the IRS says you "must include Form 8843" with your income tax return if you exclude days for either reason. If you leave days out of the count, this form is how you show the IRS why.
Why does residency status matter so much?
Because it changes what is taxed. A U.S. resident is generally taxed on worldwide income and files the same Form 1040 as a citizen. A nonresident is generally taxed only on U.S.-source income and files a nonresident return. A year with both statuses needs a dual-status return; the IRS notes this usually happens in the year you arrive or leave (IRS residency status). Treaty tie-breaker rules can change the answer further; see tax treaties.
How can you get your status confirmed?
Bring your travel dates and visa history to a consultation. Blaga counts the days for the three years, applies any exemption, checks for treaty rules, and tells you which return you file. From there, the firm prepares the return as part of foreign national tax help, or as an ordinary individual return if you turn out to be a full-year resident.
What does it look like when someone does meet the test?
Take a person with 150 days in the U.S. this year, 180 last year and 90 the year before. The count is 150 + 60 (one third of 180) + 15 (one sixth of 90) = 225. They were present at least 31 days this year and the total is over 183, so they meet the substantial presence test, unless some of those days were spent as an exempt individual. A few weeks less travel the year before can flip the answer, which is why the dates need care.
Step by step
List every entry and exit date for this year and the two years before.
Remove days spent as an exempt individual or under a qualifying medical condition.
Check 31 days in the current year.
Add current-year days, one third of last year, and one sixth of the year before; compare to 183.
Check treaty rules and file Form 8843 for any excluded days.
Questions people ask
Q1Am I a U.S. tax resident on a work visa?
If you meet the substantial presence test or hold a green card, yes. Most work visa holders are not exempt individuals, so their days count in full. After enough time in the U.S., many become residents for tax purposes even though their immigration status is temporary.
Q2Do F-1 students count their days in the U.S.?
Students are one of the groups the IRS can treat as exempt individuals, under specific visa conditions, and days in exempt status are not counted. Excluding those days requires Form 8843. Bring your visa history and the dates you held each status.
Q3Can I be a resident for part of the year?
Yes. In the year you arrive or leave, you can be a nonresident for part of the year and a resident for the rest. That calls for a dual-status return, which follows its own rules.
Q4Is my residency status checked every year?
Yes. The IRS applies the green card test and the substantial presence test calendar year by calendar year, so your status can change from one year to the next as your days in the U.S. change.
Q5Do vacation days in the U.S. count?
Yes. The test counts days you are physically present in the U.S., whatever the reason, unless you were an exempt individual or could not leave because of a medical condition.