TN 14 (04-06)

GN 05010.030 U.S. Resident Status as an Exception to the Nonresident Alien Withholding Tax

A. Background

The Deficit Reduction Act of 1984 amended the IRC for taxable years after 1984 to define the terms “resident alien” and “nonresident alien” for tax years after 1984.

B. Definitions

1. Resident Alien

A resident alien is a person who has been lawfully admitted to the U.S. for permanent residence (as explained in GN 05010.035), or meets the substantial presence test (as explained in GN 05010.040).

NOTE: U.S. resident status for nonresident alien tax purposes is determined under the IRC and IRS policies. IT IS NOT the same as residence for the 5-year residence requirement for the alien nonpayment provisions of the Social Security Act. See RS 02610.039 for information on establishing U.S. residence for the 5-year residence requirement.

2. Nonresident Alien

A nonresident alien is a person who is neither a citizen of U.S., American Samoa, Guam, NMI or Puerto Rico; nor a U.S. resident as defined in GN 05010.030B.1.

C. Procedure

To establish the U.S. resident status of a claimant/beneficiary who has been (or will be) outside U.S. for more than 3 months, obtain the following:

1. Signed Statement Form the Claimant/Beneficiary (or Payee)

A signed statement from the claimant/beneficiary (or payee) showing:

  • he/she considers himself/herself to be a U.S. resident;

  • whether he/she has ever notified Department of Homeland Security (DHS) that he/she had abandoned his/her U.S. residence, and if so, when;

  • whether he/she has ever been notified by DHS that he/she no longer had U.S. resident status, and if so, the date;

  • he/she understands that as a U.S. resident his/her worldwide income will be subject to U.S. income tax in the same manner as that of persons living in the U.S.; and

  • he/she will notify SSA promptly if his/her U.S. resident status is abandoned or revoked.

NOTE: As used in this chapter, “I-551” includes all versions of the form and the I-151.

If the claimant/beneficiary does not submit his/her I-551 as evidence of his/her U.S. resident status (as required by GN 05010.030C.2.), the statement must also show whether that I-551 was taken by DHS.

This statement may be on an application, SSA-795 or other form.

A separate statement is not necessary if he/she completes questions 10-14 on the SSA-21, since these questions are to be answered only by claimants/beneficiaries who want to be considered U.S. residents for alien tax purposes and the explanation of the tax, on this form, includes the taxation of worldwide income.

2. Evidence of His/Her U.S. Resident Status

See GN 05010.035C.1. for information on evidence of U.S. resident status for the lawful permanent residence test.

See GN 05010.045 for information on developing U.S. residence under the substantial presence test.

When developing the substantial presence test, be alert to situations in which a claimant/beneficiary may not have returned to the U.S. or may have entered for only a brief period to avoid taxation.

D. Kinds of Questionable Situations

The following are examples of situations which raise doubts as to whether a person has returned to the U.S. for the purpose of the substantial presence test:

  • U.S. address is that of a friend, relative or in care of another person.

  • U.S. address is a boarding house, general delivery or post office box in a border area.

  • Claimant/beneficiary was contacted at the U.S. address only after repeated attempts.

  • Mail from the claimant/beneficiary shows a foreign post mark.

  • Claimant/beneficiary never lived in the U.S.

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GN 05010.030 - U.S. Resident Status as an Exception to the Nonresident Alien Withholding Tax - 08/01/2008
Batch run: 09/12/2023