3

Just to explain, I am a UK national living in the UK and will move to the US on a fiance visa, which will eventually be turned into permanent residency once I'm married. My question is just at what point I become liable for taxes, and how far back will they go? Say I get permanent residency in August 2018, is that when my tax liability starts? Or do I have to go back all the way to January 2018, even though I wasn't in the states but tax resident in another country?

Thanks for any insight on this!

  • when did you enter the US? – user102008 Mar 16 '18 at 17:21
  • What is your US income situation? Once you enter on K-1 visa, you won't be able to work for few months. Are you going to file MFS or MFJ? – void_ptr Mar 16 '18 at 18:51
  • note that even if you have to file taxes for the full year, taxes you already paid that year in the UK will be deducted, so you probably owe nothing anyway. – Aganju Mar 17 '18 at 17:57
2

Let's ask the IRS:

Alien Residency - Green Card Test

You are a resident, for U.S. federal tax purposes, if you are a Lawful Permanent Resident of the United States at any time during the calendar year. This is known as the "green card" test.

You are a Lawful Permanent Resident of the United States, at any time, if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) issued you an alien registration card, Form I-551, also known as a "green card."

If you meet the green card test at anytime during the calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day on which you are present in the United States as a Lawful Permanent Resident.

So what is the substantial presence test? The IRS says:

Substantial Presence Test

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

If you arrive on August 1st 2018, get married the next day and apply for Adjustment of Status the day after that, it's still going to take "up to 120 days" (spoiler alert, it takes 120 days) to get your Green Card. You won't have met the 183-days-in-the-last-3-years requirement (unless you have from prior, non-exemptsee below visits). So your taxable residency will start the day you receive your Green Card status (it does not backdate to January 1st 2018).

Side note, if you came in on a K visa then you can't legally work while you're waiting for your Green Card to come through. This is stupid, it sucks, it also just happens to be the law. So you won't have any US earnings for the entire time you are present in the US up until your marriage and up to 3 months after. Anyway, I digress.

I think it's unlikely you're going to have a green card in hand and US income before the end of this year and therefore it's unlikely you'll have to pay US federal taxes for 2018. However, if you've spent a lot of time travelling to the US in previous years for any reasons that are not exemptsee below then you might still end up meeting the substantial presence test even though you didn't have your Green Card before the year ends. If that happens then you will have to pay US taxes on your worldwide income for the whole tax year.

If you do have to pay taxes, bear in mind that the USA and UK have double taxation treaties, so you will probably not have to pay taxes on the portion of your income that was already taxed by HMRC, or if you do, you only have to pay the difference between what you were actually taxed and what your US income tax rate would have been on the same amount of income. There is enough material there for a whole different question though, so I won't go into the details here.

Upon further review, there is an entire article dedicated to your specific question on the IRS website. There are many different rules depending on various specific situations, so rather than paste the whole thing or excerpt any particular section, I recommend reading the whole thing.

Exempt Individual

Do not count days for which you are an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following categories:

  • An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.
  • A teacher or trainee temporarily present in the U.S. under a "J" or "Q" visa, who substantially complies with the requirements of the visa.
  • A student temporarily present in the U.S. under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa.
  • A professional athlete temporarily in the U.S. to compete in a charitable sports event.
  • Hi, thanks a lot for this, very useful. Is taxation basically only forward looking, such that once you have the green card, you pay taxes on any income from that point onwards, or does it extend back to the entire fiscal year, such that getting the card in August would mean filing for the entire year, including time spent elsewhere before? – user211309 Mar 16 '18 at 19:57
  • "it's still going to take "up to 120 days" (spoiler alert, it takes 120 days)" actually more like a year (sometimes more) – user102008 Mar 16 '18 at 22:03
  • "Side note, if you came in on a K visa then you can't legally work while you're waiting for your Green Card to come through." But with Adjustment of Status, they can apply for an EAD for free, to work while the Adjustment of Status is pending, although it takes 5 months or so to get EADs these days – user102008 Mar 16 '18 at 22:05
  • Yeah, I didn't bother mentioning EAD - I applied for one when I immigrated - it arrived about a week before my green card did, doesn't seem worth the bother IMO. – CactusCake Mar 16 '18 at 22:18
  • This is the rule for partial year taxes: www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens – CactusCake Mar 17 '18 at 3:21
0

Per the IRS:

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

Note that there are some exemptions:

Do not count days for which you are an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following categories:

  • An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.
  • A teacher or trainee temporarily present in the U.S. under a "J" or "Q" visa, who substantially complies with the requirements of the visa.
  • A student temporarily present in the U.S. under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa.
  • A professional athlete temporarily in the U.S. to compete in a charitable sports event.
  • Note that this is true, but only half of the picture. One needs to meet substantial presence test or green card test. So once OP has his/her green card, he/she is a tax resident as of the date of the entry. Whichever of the two happens first. – void_ptr Mar 16 '18 at 19:02
  • Furthermore, they may file MFJ, and claim OP as tax resident for the entirety of 2018, based on the marriage. This could reduce their combined tax liability. – void_ptr Mar 16 '18 at 19:04

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.