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US Immigration and Tax

12th November 2011
By Paul Anderson in Immigration Law
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US citizens are not the only ones who have to file tax returns. Certain US immigrants and residents may also have to file, depending on their immigration status in the US.

To figure out if you have to file a tax return in the US, you have to check whether or not you are classified as a tax resident. Per immigration laws, tax residents have to report their entire income, even if only a part of the income was earned in the US to the Internal Revenue Service (IRS). If part or the entire income was earned internationally, the income will be subject to international tax treaties. Income earned in the US will be taxed by the US government.

Green card holders:

All lawful permanent residents (green card holders) are considered as tax residents in the US.

Some immigrants are considered as tax residents based on how much time they spend in the US. But it is important to remember that this applies only to visa holders and not immigrants who have already obtained permanent residency.

Green card holders who spend too much time outside of the US should note that traveling too much can be taken as abandoning a green card and could result in removal proceedings. If you are a green card holder and do not file taxes in the US, it could hamper your chances of obtaining US citizenship as submitting tax returns during your time as a green card holder is mandatory when filing Form N-400Application for Naturalization. Not filing taxes at all can also result in the deportation process.

Visa Holders:

Most immigrant visa holders are required to file US tax. Even if an immigrant visa holder has not been in the US a full year or has not made all of their income in the US, it establishes the fact that they are adapting to residency in the US. Tax returns are submitted as proof when immigrants file Form I-485, Application to Register Permanent Residence or Adjust Status.

Non immigrant visa holders only become tax residents if they spend at least 183 days of the year within the borders of the US. However, per the IRS, non immigrants who have been in the US for a total of at least 183 "weighted days" during the prior three years are also classified as tax residents. All the days in the current year count as one day, all days in the previous year are taken as one-third of a day, and all days in the year before that are taken as one-sixth of a day. If the total comes out to 183 days, the non immigrant is required to file a tax return. But this system does not apply to student visa holders and some foreign nationals who work for the government.

Non immigrants who have not been in the US for 183 weighted or non-weighted days and who can prove that they have a tax home abroad can be exempted as tax residents.

Undocumented Immigrants:

Undocumented immigrants do not pay taxes, as they want to avoid government inquiries into their undocumented status. But tens of thousands of undocumented residents file US tax returns every year.
The IRS does not ask any information about immigration status on the tax forms. The IRS is not allowed to disclose taxpayer information to other US government agencies. Many people who do not have a legal immigration status hope that filing their taxes will somehow lead them to American citizenship some time later.
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