Foreign Income & Foreign Income Exclusion
This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Do I have to meet the 330-day presence test or have a valid working resident visa to meet the requirement for foreign income exclusion?
To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following: - A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
- A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty with a nondiscrimination article in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
- A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
References: 13.4 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - General I am a foreign national and came to this country on June 30th of last year. I have a H-1 visa. What is my tax status regarding resident, nonresident alien, or resident alien?
You were a dual status alien last year. As an H-1 visa holder in the U.S. for 183 days or more, you likely became a resident, for tax purposes, on June 30th. For the part of the year you are a resident alien, you are taxed on income from all sources.
For the part of the year that you are not a resident alien, you are taxed on income from sources outside the United States, unless the income is effectively connected with a trade or business in the United States.
Income from U.S. sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Generally, tax treaty provisions apply only to the part of the year you were a nonresident and only if you are a resident of a country that has a treaty with the United States and you are resident for treaty purposes for the taxable year.
For that part of the year that you are a nonresident, file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. For that part of the year you are a resident, file Form 1040 (PDF) or Form 1040A (PDF).
References: I have an H-1 visa and my husband has an F-1 visa. We both lived in the United States all last year and had income. What kind of form should we file? Do we file our taxes separately or jointly?
You will have met the substantial presence test and will be taxed as a resident alien for the previous year. You may file a joint tax return if your husband makes the choice to be treated as a resident for the entire year. Generally, you cannot claim tax treaty benefits as a resident alien on Form 1040 (PDF), U.S. Individual Income Tax Return. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for additional information.
References: I was an international student (F-1 visa) until October 1, then my visa status was changed to H-1. Should I file my income tax return as a dual status or nonresident alien?
Assuming you were not in the U.S. on your F-1 student visa for over 5 years, you may file as a nonresident for the entire year or, if you qualify under the first year choice, you may file as a dual status alien. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for additional information.
References: 13.7 Aliens and U.S. Citizens Living Abroad: U.S. Citizens Overseas I am a U.S. citizen and married a nonresident alien last year. At that time, we filed an application with Immigration Naturalization Service (INS) for my spouse's adjustment of status. We plan to file married filing jointly. Will I need to use Form 1040NR?
As a U.S. citizen, you cannot file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. If you make an election to file a joint return with your nonresident alien spouse (your spouse must, in turn, elect to be taxed as resident), file Form 1040 (PDF), U.S. Individual Income Tax Return, and report both incomes from worldwide sources. You will need to get an ITIN for your spouse. To apply for an ITIN, file Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number.
References: - Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
- Form 1040 (PDF), U.S. Individual Income Tax Return
- Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number
- Tax Topic 857, Individual Taxpayer Identification Number - Form W-7
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