Taxation of U.S. Residents: Green Card vs Substantial Presence
Olga Guzhva • March 21, 2024
If you are a U.S. resident within the meaning of Internal Revenue Code (IRC) section 7701(b)(1)(A), an immigrant needs to understand the U.S. tax obligations.
When you are a permanent resident, your worldwide income is subject to U.S. income tax the same way as a U.S. citizen.
You are a resident of the United States for tax purposes if you meet either the green card test
or the substantial presence test
for the calendar year.
1. “Green Card” Test means that you possess a Permanent Resident Card, Form I-551, also known as a "green card”, at any time during the calendar year.
- You continue to have U.S. resident status, unless: you voluntarily renounce and abandon your resident status, or your resident status is terminated, either by the USCIS, or by a U.S. federal court.
If you meet the green card test at any time during the calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day on which you are present in the United States as a lawful permanent resident. In other words, if you have your green card for less than a full calendar year, your tax obligations could be less and are calculated as follows:
2. In order to meet the Substantial Presence test, you must be physically present in the United States on at least:
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
a. All the days you were present in the current year, and
b. 1/3 of the days you were present in the first year before the current year, and
In other words, a look back applies when calculating a substantial presence test for the U.S. tax purposes. If a green card holder does not meet a substantial presence test, then he or she is subject to U.S. income tax the same way as a U.S. citizen BUT ONLY for a portion of the calendar year, from the date of becoming a U.S. permanent resident.c. 1/6 of the days you were present in the second year before the current year.
Navigating the complexities of the U.S. immigration and tax laws often requires professional legal guidance. Seeking assistance from an experienced immigration attorney well-versed in U.S. taxation can significantly enhance the chances of your successful immigrant planning, ensuring compliance with these intricate regulations and requirements.
If you have any questions about what this means for you, please schedule a consultation with our office.
We look forward to working with you!
This blog is not intended to be legal advice and nothing here should be construed as establishing an attorney client relationship. Please schedule a consultation with an immigration attorney before acting on any information read here.
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Olga Guzhva
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For applicants in this tier, no tourist, student, work, or immigrant visas will generally be issued, subject to a narrow set of exceptions discussed below. Tier 2: Partial Suspension Under Proclamation 10998 (19 Countries + Turkmenistan) Nationals of these 19 countries are subject to a partial suspension: Angola, Antigua and Barbuda, Benin, Burundi, Côte d'Ivoire, Cuba, Dominica, Gabon, The Gambia, Malawi, Mauritania, Nigeria, Senegal, Tanzania, Togo, Tonga, Venezuela, Zambia, and Zimbabwe. For these countries, the proclamation suspends: All immigrant visas, and B-1/B-2 visitor visas, F and M student visas, and J exchange visitor visas. Critically, employment-based and other nonimmigrant categories including H, L, O, P, and R visas remain available to nationals of these countries, although consular officers are directed to reduce the validity period of any such visa to the minimum extent permitted by law. 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A Brazilian artist seeking an O-1, a Colombian executive seeking an L-1, or a Lebanese professional seeking an H-1B can generally continue to apply. The policy is being challenged in court. Plaintiffs in CLINIC v. State Department argue that the freeze violates INA § 1152's prohibition on nationality-based discrimination in immigrant visa issuance, the Administrative Procedure Act, and the Fifth Amendment. The outcome is not predictable, and applicants should not delay strategic planning while awaiting a ruling. Who Is Exempt or Otherwise Unaffected Several categories of individuals are not covered by Proclamation 10998, even where their country of nationality appears on the list: Lawful permanent residents of the United States. Green card holders may continue to travel and re-enter, though re-entry can still involve closer secondary inspection. Individuals physically present in the United States on January 1, 2026. 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While valid visas are not being revoked, port-of-entry scrutiny has increased, and discretionary admission decisions are ultimately made by Customs and Border Protection. Seek counsel before international travel if you are from any affected country, hold any form of conditional or pending status, or have any concerns about prior immigration history. When to Consult an Attorney The combination of the Proclamation 10998 travel ban, the 75-country immigrant visa pause, ongoing litigation, and the additional USCIS holds on certain benefit applications has produced a landscape where the right answer is rarely obvious from the news alone. Speaking with counsel is especially important when: Your country appears on either list, and you have a pending or planned visa application. You are weighing whether to leave the United States for a consular interview. You are an employer with a foreign national workforce and need to understand which categories remain viable. You are a dual national considering which passport to use. You hold a valid visa from before January 1, 2026, and are uncertain whether to travel. At Santos Lloyd Law Firm, we represent clients from across the affected country lists including substantial numbers in entertainment, sports, business, and family immigration and we are actively monitoring both the litigation and the State Department's evolving guidance. If you have questions about how the current restrictions apply to your case or your company, our attorneys are available to help you build a plan.
