Filing Taxes as an Immigrant

Almost everyone who earns income in the United States is required to file a federal tax return.

Resident Alien vs. Nonresident Alien

• Resident alien — green card holder or meets the substantial presence test (183+ days). Files the same as a citizen — Form 1040.
• Non-resident alien — fewer than 183 days. Files Form 1040-NR. Only income from U.S. sources is taxed.

Substantial Presence Test

Calculated using the following formula: all days in the current year + 1/3 of days in the prior year + 1/6 of days in the year before that. If the total is 183 or more, you are a tax resident.

The U.S. tax system includes many forms. Here are the most important ones for immigrants.

Key Forms

• Form 1040 — standard return for residents
• Form 1040-NR — for nonresident aliens
• Form W-2 — from your employer (income and withholdings)
• Form 1099 — freelance/contract income
• Form 8938 / FBAR — reporting of foreign accounts

Deadlines

• April 15 — filing and payment deadline
• June 15 — automatic extension for those living abroad
• October 15 — deadline when filing an extension (Form 4868)

The United States requires you to report foreign financial assets.

FBAR (FinCEN Form 114)

If the aggregate balance of your foreign accounts exceeded $10,000 at any point during the year, you are required to file an FBAR by April 15 (with an automatic extension to October 15).

FATCA (Form 8938)

Reporting of foreign financial assets is required when the following thresholds are exceeded:

• Single: $50,000 at the end of the year or $75,000 at any point during the year
• Married Filing Jointly: $100,000 / $150,000

Penalties for Non-Filing

Penalties for failing to file FBAR and FATCA are very serious — up to $10,000+ per violation. For willful concealment, penalties can be significantly higher.

Resident immigrants are entitled to the same deductions and credits as U.S. citizens.

Common Credits

• Child Tax Credit — up to $2,000 per child (child must have a SSN)
• Earned Income Tax Credit (EITC) — for low-income workers (SSN required)
• Education credits — American Opportunity and Lifetime Learning
• Premium Tax Credit — subsidy for health insurance purchased through the Marketplace

Recommendations

• Work with a CPA who is familiar with immigration tax issues
• Free assistance is available through VITA (Volunteer Income Tax Assistance) for income up to $67,000
• Keep all W-2s, 1099s, and receipts for expenses