To be precise, you must not have been a resident alien under the definitions found Internal Revenue Code Section 7701(b)(1)(A) for the prior year.
Prior Year: Be a Nonresident Alienįirst, you must have been a nonresident alien in the prior year. Then there are complicated rules for what you do in the current year. ((Internal Revenue Code Section 7701(b)(4)(A).)) In order to make the election for a particular tax year, you must know certain things about the past, and you must accurately predict certain things about the future. The requirements to satisfy are, like many things in tax law, unnecessarily complicated. By making the election described here, the taxpayer becomes a resident alien and will be able to take these deductions and thereby reduce his or her Federal income tax liability.Īs you read the description of this election-and what is required to qualify for it-you will probably wonder whether the effort is worth the expected tax savings. Or perhaps there are some foreign losses in the current year that could be taken on Form 1040 that cannot be taken on Form 1040NR. resident under either the substantial presence test or the green card test.Īs a nonresident alien, the taxpayer will not be able to claim an itemized deduction for mortgage interest or property tax. Therefore they will not qualify as a U.S. This election is used by nonresident aliens who become residents of the United States after the middle of the year, and do not hold a green card. Here is how you do it, by making a special election under Section 7701(b)(4) of the Internal Revenue Code. enough days to meet the substantial presence test. You do not have a green card, and you were not in the U.S. SeptemPhil Hodgen Nonresidents with US Activities, Speeches, Publications, and Events Electing Resident Alien Status Under Section 7701(b)(4)