In this post, we will be talking about newcomers to the USA, their requirements to file income tax and eligibility to receive a tax refund, if applicable.
There are federal income tax return and state income tax return. If you live in any of these 9 states, you do no need to file State income tax return. These states do not impose Income Tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
For tax purposes, the IRS define an alien as an individual who is not a U.S. citizen. Aliens are classified as nonresident aliens and resident aliens.
Nonresident Aliens: If you are not a U.S. citizen, you are considered a nonresident alien unless you meet one of the two tests, Green Card Test or Substantial Presence Test. Nonresident aliens are taxed only on their income from sources within the United States and on certain income connected with the conduct of a trade or business in the United States.
Green Card test: You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2019.
Substantial Presence Test: To meet this test, you must be physically present in the United States on at least: (1) 31 days during 2019, and (2) 183 days during the 3-year period that includes 2019, 2018, and 2017, with special day counting per each year.
Dual-Status Aliens: different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. The most common dual-status tax years are the years of arrival and departure. If you are a dual-status alien, you can still elect to be treated as a U.S. resident for the entire year if certain rules apply to you. We can help you review these rules and make the proper election that benefits you the most.
Special reporting’s maybe required for first time filers to correctly claim deductions and credits for the entire tax year. Make sure to choose the right and credential tax professional when filing your taxes to help you avoid potential audits and delays in your tax refund.