27/12/2019 Resident Alien Definition

ECONOMY GOVERNMENT & POLICY

Resident Alien
By JULIA KAGAN | Updated May 9, 2019

What Is a Resident Alien?

A resident alien is a foreign-born United States resident who is not a U.S. citizen. A resident
alien is also known as a permanent resident or a lawful permanent resident, which means
they are considered an immigrant who has been legally and lawfully recorded as a resident
of the country. A resident alien must have a green card or pass a substantial presence test. 

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Understanding Resident Alien

A resident alien is a foreign person who is a permanent resident of the country in which he or
she resides but does not have citizenship. To fall under this classification in the United
States, a person needs to either have a current green card or have had one in the previous
calendar year.

Important: Resident and non-resident aliens have different tax filing advantages
and disadvantages.

People can also fall under the U.S. classification of resident alien if they pass the substantial
presence test. In order to do so, they must have been in the United States for more than 31

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days during the current year, along with having been in the United States for at least 183
days over a three-year period, including the current year.

According to the United States Citizenship and Immigration Services (USCIS), there are three
types of resident alien:

Permanent resident: This is someone who has been given the lawful and legal right by
the government to live in the United States.
Conditional resident: This person receives a two-year Green Card, which is usually given
to people who have applied for residency based on marriage or because they are
entrepreneurs. A person must apply to have the conditions removed 90 days before
the Green Card expires, or else the permanent resident status will be removed. 
Returning resident: This is someone who has been outside the U.S. and is returning to the
country. This person, also known as a "special immigrant," and must apply for
readmission if he is outside the U.S. for more than 180 days. 

The main issue with resident aliens is that of tax law. For example, a resident alien can use
foreign tax credits, whereas a non-resident cannot. However, in general, a resident alien is
subject to the same taxes as a U.S. citizen, while a non-resident alien only pays tax on
domestic income that is generated within the Unites States, not including capital gains.

FAST FACT
The U.S. Department of Homeland Security recorded admitting 1.1 million new
permanent residents in the country in 2017, the most recent figures available.

Resident aliens are required to report worldwide income from sources both within and
outside the United States. Income is reported using Form 1040. Non-resident aliens, on the
other hand, report domestic income using Form 1040NR or Form 1040NR-EZ.
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Example of a Resident Alien

Often times, resident alien status provides positive benefits for the United States and for
those seeking the status. For example, Cristela Alonzo, an actress, comedian, and
contributor to Time Magazine, had a mother and brother who were both granted resident
alien status. Her mother, a single parent, immigrated from Mexico with her eldest son and
tried for years to obtain resident alien status.

KEY TAKEAWAYS
A resident alien is a foreign-born, non-U.S. citizen who lives in the U.S.
Resident aliens must have a green card or pass a substantial presence test.
In general, a resident alien is subject to the same taxes as a U.S. citizen.

After numerous attempts, both Alonzo's mother and her older brother received the desired
status. Then, Alonzo's mother had three natural born citizens, bringing the total number of
her children to four. As of today, each of the four kids hold respectable jobs and are
contributing members of society, helping the U.S. economy. This family would not have been
able to add value to the American economy and realize a better life had Alonzo's mother not
been granted resident alien status.

Special Considerations
It is possible to be considered exempt from resident alien status, in which case a person does
not need to prove compliance with the Green Card test or the substantial presence test.
Situations in which a person is present in the United States on government-related issues or
when a student or teacher is temporarily present in the United States are both examples of
exemptions.

These exempt aliens can, depending on the situation, file for an adjustment of status, a
process that allows them to remain the country and apply to become a permanent resident
with resident alien status. 

Related Terms
IRS Publication 519 Definition
IRS Publication 519 or the U.S. Tax Guide For Aliens is an IRS document that details tax procedures for
individuals who are not citizens of the U.S. more

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Dual-Status Taxpayer
A dual-status taxpayer meets the IRS criteria of being both a resident alien and non-resident alien in a
single tax year. more

Who Is a Nonresident Alien?

A nonresident alien is a noncitizen who has not passed or is exempt from the green card or substantial
presence tests. more

Learn about Withholding Tax

A withholding tax is a tax that is withheld from employees' wages and paid directly to the government
by the employer. more

Form 1078: Certificate of Alien Claiming Residence Definition

Overview
Form 1078: Certificate of Alien Claiming Residence was an official document issued by the Internal
Revenue Service (IRS) permitting the undersigned to claim residency within the U.S. for income tax
reporting purposes. The form was replaced by Form W-9 in the 1998 tax year. more

183-Day Rule
The 183-day rule is part of the Internal Revenue Service's test to determine if a person is a United
States resident for tax purposes. more

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