Welcome to the ultimate guide on how to obtain tax residency in the United States as a foreign individual. Whether you're a digital nomad, expat, or location-independent worker, this step-by-step guide will walk you through the process of establishing your tax residency in the U.S. Let's dive in!
Step 1: Determine Your Eligibility
To establish tax residency in the U.S., you must first determine if you meet the Substantial Presence Test (SPT). This test considers the number of days you have been physically present in the U.S. over a three-year period. Specifically, you must be present in the U.S. for at least 31 days during the current year and 183 days during the three-year period that includes the current year and the two years immediately before that. The 183 days are calculated as follows: - All the days you were present in the current year, and - 1/3 of the days you were present in the previous year, and - 1/6 of the days you were present in the year before that.
Step 2: Obtain a U.S. Visa
To stay in the U.S. legally, you need to obtain an appropriate visa. Common visas for digital nomads and expats include the B-1/B-2 visitor visa, the H-1B visa for specialized workers, and the L-1 visa for intra-company transferees. Each visa has specific requirements and application procedures, so be sure to review the U.S. Citizenship and Immigration Services (USCIS) guidelines for the visa category that best fits your situation.
Step 3: Secure a U.S. Address
Having a physical address in the U.S. is essential for tax residency. You can rent an apartment, house, or even use a family member's address. This address will be used for official correspondence and is a key element in establishing your ties to the U.S.
Step 4: Apply for a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
If you are eligible for an SSN, you should apply for one through the Social Security Administration (SSA). If you are not eligible for an SSN, you will need to apply for an ITIN through the IRS using Form W-7. An SSN or ITIN is necessary for filing tax returns and other tax-related documents.
Step 5: File Form 1040 - U.S. Individual Income Tax Return
Once you meet the Substantial Presence Test and have obtained the necessary identification numbers, you must file Form 1040, U.S. Individual Income Tax Return, annually. This form reports your worldwide income and is essential for maintaining your tax residency status in the U.S.
Legal References
- Internal Revenue Code (IRC) Section 7701(b) - Definition of Resident Alien and Nonresident Alien
- U.S. Citizenship and Immigration Services (USCIS) - Visa Categories
- IRS Publication 519 - U.S. Tax Guide for Aliens
- Social Security Administration (SSA) - Applying for a Social Security Number
- IRS Form W-7 - Application for IRS Individual Taxpayer Identification Number (ITIN)
Useful Links
