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# Tax Residency in United States
- URL: https://university.heavnn.io/tax-residency-in-united-states/
- Published: 2024-04-02T06:52:50.000Z
- Updated: 2024-04-23T06:17:56.000Z
- Author: Heavnn
- Tags: United States

## Tax Residency in the United States

## 1\. Criteria for Determining Tax Residency

According to the Internal Revenue Code (IRC) Section 7701(a)(38), an individual is considered a resident of the United States for tax purposes if they meet either the green card test or the substantial presence test.

## Green Card Test: An individual is a resident if they are a lawful permanent resident (LPR) of the United States.

**Substantial Presence Test:** An individual is a resident if they are physically present in the United States for at least 31 days during the current calendar year and 183 days during the three-year period that includes the current year and the two preceding years.

**2\. Impact of International Tax Treaties**

**The United States has entered into tax treaties with over 60 countries to prevent double taxation and promote cross-border trade and investment. These treaties may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.**

**For example, under the US-Canada tax treaty, an individual is considered a resident of the United States if they have a "substantial connection" to the United States. This includes factors such as their permanent home, family ties, and economic interests.**

**The treaty also provides a tie-breaker rule for individuals who are considered residents of both the United States and Canada under each country's domestic law. In such cases, the individual is considered a resident of the country where they have their "closer connection."**

## **Conclusion**

**The criteria for determining tax residency in the United States are complex and can be affected by international tax treaties. It is important to consult with a tax professional to determine your residency status and the potential tax implications of any cross-border activities.**

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