Many foreign nationals hoping to live and work in the United States may need to understand the details of the Substantial Presence Test. Did you know that if you've spent more than 180 days in the U.S. over the past three years, you might be considered a U.S. tax resident? The Internal Revenue Service (IRS) provides clear guidelines through this test to determine tax residency status.

HOW THE TEST WORKS

To meet the Substantial Presence Test, you must satisfy two conditions in a calendar year:

  • 1. Be physically present in the U.S. for at least 31 days during the current year
  • 2. Meet the 183-day requirement based on a weighted three-year calculation:
    • All days present in the current year
    • Plus one-third of days from the previous year
    • Plus one-sixth of days from the year before that

Consider this example: If you spent 120 days in the U.S. during each of 2021, 2022, and 2023, your 2023 calculation would be:

  • 2023: 120 days (full count)
  • 2022: 40 days (120 × 1/3)
  • 2021: 20 days (120 × 1/6)

This totals 180 days —just below the 183-day threshold—meaning you wouldn't be considered a U.S. tax resident for 2023.

EXEMPTIONS TO NOTE

The IRS excludes certain days from the Substantial Presence Test calculation:

  • Commuting days from Canada or Mexico for regular cross-border workers
  • Brief transits (under 24 hours), particularly during flight connections
  • Days spent in the U.S. as a crew member of foreign vessels
  • Days unable to leave due to sudden medical conditions
  • Days covered by specific exemptions for certain individuals

GEOGRAPHIC DEFINITIONS

For tax purposes, the United States includes:

  • All 50 states and Washington, D.C.
  • Territorial waters and the adjacent continental shelf

Notably excluded are other U.S. territories and airspace.

WHY IT MATTERS

Understanding the Substantial Presence Test is crucial for foreign nationals determining their U.S. tax filing obligations. Whether you're a short-term visitor or potential permanent resident, this test could significantly impact your tax liabilities and rights. Proper planning around these rules can help optimize your U.S. travel plans and financial responsibilities.