Keyword: Substantial Presence Test

This is archived information that pertains only to the 2005 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Do I have to meet the 330-day presence test or have a valid working resident visa to meet the requirement for foreign income exclusion?

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty with a nondiscrimination article in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.

U.S. tax law does not specifically require a foreign resident visa or work visa for this purpose, but you (must/should) comply with the other country's laws.

I am a nonresident alien. Can I take the foreign earned income exclusion if I meet the bona fide resident test or physical presence test? If yes, what is the tax form used for nonresident taxpayer?

No, nonresident aliens do not qualify for the foreign earned income exclusion. Only if you are a U.S. citizen or a resident alien of the United States and live abroad, may you qualify to exclude a specific amount of your foreign earned income. Refer to chapter 4 of Publication 54 Tax Guides for U.S. Citizens and Resident Aliens Abroad, for limitation that apply. If you are the nonresident alien spouse of a U.S. citizen or resident alien, you can elect to be treated as a U.S. resident in order to file a joint return. In this case, you can take the foreign earned income exclusion if otherwise qualified. Refer to Publication 519, U.S. Tax Guide for Aliens, for detailed instructions on how to make this election.

However, nonresident aliens would be able to exclude their foreign earned income under the dual-status rules. Refer to Tax Topic 852 for dual-status information. A nonresident alien is generally not subject to U.S. tax on compensation for services performed outside the U.S.

Under my visa as a temporary nonresident alien, I'm not subject to social security and Medicare withholding. My employer withheld the taxes from my pay. What should I do to get a refund of my social security and Medicare?

If social security tax and Medicare were withheld in error from pay received which was not subject to the taxes, you must first contact the employer who withheld the taxes for reimbursement. If you are unable to get a refund from the employer, file a claim for refund with the Internal Revenue Service on Form 843 (PDF), Claim for Refund and Request for Abatement.

You must attach the following to your claim:

a copy of your Form W-2 (PDF), Wage and Tax Statement, to prove the amount of tax withheld;
Form I-797, INS Approval Notice, is needed if you have changed your status from F-1 or J-1 to another status prior to filing the claim;
if your visa status changed during the tax year you should attach copies of the pay stubs that cover the period of exemption from social security taxes;
a copy of INS Form I-94, Arrival/Departure Record, if you are still in the United States;
a copy of your valid entry visa;
Form 8316 (PDF) , Information Regarding Request for Refund of Social Security Tax , or a signed statement stating that you have requested a refund from the employer and have not been able to obtain one; and
a copy of Form 1040NR (PDF) , US Nonresident Alien Income Tax Return (or Form 1040NR-EZ (PDF)), for tax the year in question. Processing of your claim may be delayed if you submit it less than six weeks after you filed Form 1040NR or 1040NR-EZ.

In addition to the documentation listed above foreign student visa holders should also attach the following:

a copy of Form I-20, Certificate of Eligibility, endorsed by your student advisor and stamped by the Bureau of Citizenship and Immigration Services; and
a copy of the Employment Authorization Document of your Optional Practical Training (e.g., Form I-766, I-538 or 688B).
if you are an exchange visitor, attach a copy of Form IAP-66 or DS-2019 to your claim.

File the claim, with attachments, with the IRS where the employer's returns were filed. If you do not know where the employer's returns were filed, send your claim to the Internal Revenue Service Center, Philadelphia, PA 19255.

For more information, refer to Chapter 8 of Publication 519, U.S. Tax Guide for Aliens .

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