🇺🇸 Tax residency in United States

The United States is the outlier on this whole site: it taxes by citizenship, not just by residence. US citizens and green card holders owe US tax on their worldwide income no matter where they live, and they file Form 1040 every year regardless of how many days they spent on US soil. Leaving the country does not leave the system; only renouncing citizenship or surrendering the green card does, and both have their own tax consequences.

For everyone else, residency turns on the substantial presence test. You are a resident alien for a year if you were present at least 31 days that year and your weighted total reaches 183: all days in the current year, plus one third of the days in the prior year, plus one sixth of the days in the year before that. The formula is the trap; frequent visitors who never spend six straight months in the US can still cross 183 on the rolling arithmetic. There is an escape hatch: the closer connection exception can keep you a nonresident if you were under 183 actual days in the current year and can show your tax home and stronger ties (home, family, belongings, licenses, voting) sit in another country. It is a facts-and-circumstances test, and a US home, a US-based family, or a US-registered business makes it hard to win.

Triggering residency means worldwide taxation. The federal top marginal rate is 37%, and most states layer their own income tax on top, with the amount depending on the state. For a nomad with foreign freelance income, becoming an accidental US resident converts income the US previously had no claim on into fully reportable income, plus the FBAR and foreign-asset reporting that comes with US person status.

There is no shelter regime for people who trip residency. The Foreign Earned Income Exclusion runs the other direction: it lets US citizens and residents living abroad exclude foreign earned income if they meet the bona fide residence or physical presence tests overseas. It does not help someone spending substantial time stateside.

Treaties can matter for nationals of treaty countries such as the UK or Germany, both of which have income tax treaties in force with the US: the residency tie-breaker articles can assign you to your home country even when the substantial presence test is met, provided you claim the position properly on the right forms. Do not assume a treaty saves you automatically; it has to be claimed, and the facts have to support it.

A US tax professional is worth engaging when you have crossed more than incidental time in the US, hold US income or assets, are near the weighted 183 line, or want to document a closer connection or treaty position. Those filings are exactly where self-service goes wrong, and the penalties for missed reporting are out of proportion to the cost of advice.

If you are pushing 100 days a year in the US on a rolling basis, start counting with the formula, not the calendar.

This information is for educational purposes only and does not constitute legal or tax advice.