We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
What is the Substantial Presence Test and How Does It Affect You?
Definition & Meaning
The substantial presence test is a method established by the Internal Revenue Service (IRS) to determine if a foreign national qualifies as a resident alien for tax purposes in the United States. To meet this test, an individual must be physically present in the U.S. for a minimum of:
31 days during the current year, and
183 days during a three-year period that includes the current year and the two preceding years.
When calculating the 183 days, all days present in the current year are counted, along with:
One-third of the days present in the first year before the current year, and
One-sixth of the days present in the second year before the current year.
Table of content
Legal Use & context
The substantial presence test is primarily relevant in tax law, particularly when determining an individual's tax obligations as a resident or non-resident alien. Understanding this test is crucial for foreign nationals working or living in the U.S. who need to file tax returns. Users can utilize legal templates from US Legal Forms to assist in preparing necessary tax documents and forms related to residency status.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A foreign national spends 40 days in the U.S. in 2023, 90 days in 2022, and 60 days in 2021. To determine their residency status:
Days in 2023: 40 days counted.
Days in 2022: 30 days counted (90 days x 1/3).
Days in 2021: 10 days counted (60 days x 1/6).
Total: 40 + 30 + 10 = 80 days. This individual does not meet the substantial presence test.
Comparison with related terms
Term
Definition
Resident Alien
A foreign national who meets the substantial presence test or has a green card.
Non-Resident Alien
A foreign national who does not meet the substantial presence test.
Common misunderstandings
What to do if this term applies to you
If you believe the substantial presence test applies to your situation, start by calculating your days of presence in the U.S. for the relevant years. Consider using US Legal Forms to access templates for tax forms you may need to file. If your situation is complex or uncertain, consulting a tax professional or legal advisor is recommended.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.