Many people are under the impression that non-citizens don’t have to pay taxes. This might be true in some instances, but there many circumstances in which a non-citizen is required to pay taxes.
Failure to pay taxes can result in legal penalties for the non-citizen, which can have negative consequences for them in the long run. The laws governing taxes for non-citizens are different depending on whether the person holds a non-immigrant visa or a green card. Tax requirements depend on whether the person is classified as a “tax resident” or not
For nonimmigrant visa holders, the tax rules are as follows:
- Non-immigrant visa holders may be classified as tax residents depending on the amount of time they spent in the U.S. in a given year;
- If the non-immigrant visa holder has been in the U.S. for at least 183 days (half the year), they are considered tax residents and must file taxes if applicable
- For non-immigrants who have spent less than 30 days of the current year in the U.S., they may be considered taxable residents if they have been in the U.S. for a “weighted” total of at least 183 days in the past 3 years. This can get complicated, as one day in the current year counts as 1 day, one day in the previous year counts as 1/3 of a day, and one day in the year before that counts as 1/6 of a day.
- A non-tax resident may also be required to file taxes if they have no “tax home” in a different country. In that case, the IRS may list the U.S. as the person’s tax home, thus making them responsible for paying and filing taxes
- Some tax rules may not apply to non-immigrant visa holders who are serving as teachers, students, foreign government employees, or athletes
For permanent visa holders (i.e., “green card” holders), the tax rules are as follows:
- A person who has received a green card is automatically declared a U.S. tax resident
- Thus, green card holders must declare their tax information and income to the appropriate U.S. government agencies
- Failure to supply tax information can negatively affect the green card holder’s chances at filing for U.S. citizenship later on
Do U.S. Tax Residents Need to Declare Tax Information From Outside of the U.S.?
If a non-citizen is classified as a U.S. tax resident, they are required to report all of their “worldwide income” to the IRS. This means that if they are generating income outside of the U.S., they also need to declare this income when they file their tax reports.
To be clear, not all reported “worldwide” income will be taxed. The non-citizen tax resident simply has a duty to declare such income on their U.S. tax returns. Whether or not they will actually be taxed on their worldwide income depends on other sources of law, namely international treaties.
What are the Legal Penalties Involved with Visa Holders and Tax Violations?
If you have a visa or green card and are classified as a tax resident, you’ll need to follow all the laws regarding tax filing and income reports. Failure to do so could negatively affect the person’s future applications with regards to:
- Adjustment of status
- Visa extensions or renewals
- The naturalization and citizenship process
In addition, tax violations can often be grounds for more serious measures such as deportation/removal. Thus, it’s important for a non-citizen to understand their obligations with respects to the current U.S. tax laws.
Do I Need a Lawyer for Issues With Visa Holders and Tax Violations?
If you or your loved ones are unsure of current tax classifications, you may wish to contact an immigration lawyer for advice. An experienced, qualified immigration attorney in your area can determine your tax status and can provide you with advice on how to satisfy tax requirements. Also, if you are being summoned to an immigration hearing, your lawyer can provide you with representation during the proceedings.