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Tax returns for visa holders begin with one question: are you a US tax resident? The IRS answers it by counting days, and it looks at immigration category only in a few defined carve-outs. Which return you file, what income is taxable, and what you report about accounts outside the country all depend on that answer.
How does the IRS decide if a visa holder is a US tax resident?
The two standard tests for US tax residency are the green card test and the substantial presence test. People who meet neither are generally nonresident aliens, although the first-year choice or a spouse election can change how they file.
A resident: taxed on worldwide income, and reports foreign accounts
A nonresident: taxed on US-source income only, and generally reports nothing about assets held abroad
The same person can be one in a given year and the other the next, without changing job, address, or visa.
How do you count days for the substantial presence test?
You meet the test in a year when you were present in the US at least 31 days during that year and your weighted three-year total is at least 183 days. Count every day of the current year, one third of the days in the prior year, and one sixth of the days in the year before that.
Part days count as whole days, and so do weekends and holidays.
Example: 120 days in the US in each of three years
| Year | Days present | Weight | Days counted |
|---|---|---|---|
| Current year | 120 | Full | 120 |
| Prior year | 120 | One third | 40 |
| Two years before | 120 | One sixth | 20 |
| Total | 180, under 183: nonresident |
- Days that count toward the test
- The 183-day threshold.
Who needs to file Form 8843?
Every exempt individual other than A and G visa holders, whether or not they also file a tax return. An exempt individual is exempt from the day count, not from tax, and the IRS defines the categories narrowly:
Students on F, J, M and Q visas: five calendar years
Teachers and trainees on J and Q visas: two years out of the preceding six
Foreign government-related individuals on A and G visas, other than A-3 and G-5 holders: no year limit, and they do not file Form 8843
A student with no US income still files Form 8843.
The five years are calendar years, counted across your lifetime, not twelve-month periods per visa: a semester in the US years ago used one of them, and arriving in December uses a full year.
What is the closer connection exception?
A way to be treated as a nonresident even though you met the substantial presence test. You qualify if you were present fewer than 183 days in the current year, kept a tax home in another country, and had a closer connection to that country than to the US.
You claim it on Form 8840. You lose the exception if you:
- File Form 8840 late, unless you can show clear and convincing evidence that you tried to comply
- Apply for a green card, or take steps toward one, however strong your connection to the other country
1040 vs 1040-NR: which form does a visa holder file?
Residents file Form 1040; nonresidents file Form 1040-NR.
What a Form 1040-NR filer cannot claim
- No standard deduction, with one treaty exception for students from India
- No joint return with a spouse, unless you make a spouse election
- No earned income credit
A Form 1040-NR is due April 15, or June 15 if you had no US wages or withheld non-employee compensation and no US office or place of business. There is no income floor: a nonresident with any taxable US-source income files, whatever the amount.
Can an international student claim the standard deduction?
No, with one exception: a student or business apprentice from India filing Form 1040-NR, under Article 21(2) of the US-India treaty. You lose it when you stop being a nonresident student, so you cannot claim it for an H-1B year.
Example: an F-1 student from India on OPT, 2025
| Item | With Article 21(2) | Without |
|---|---|---|
| Wages | $40,000 | $40,000 |
| Standard deduction (2025) | $15,750 | $0 |
| Taxable income | $24,250 | $40,000 |
Under other treaties, students and teachers can exclude a capped amount of wages or scholarship income; the terms differ by country and depend on where you lived before you arrived, and your employer applies them through Form 8233.
A dual-status year. You were a nonresident for part of the year and a resident for the rest, as in the year you arrive and the year you leave. Each set of rules applies to its own portion, you get no standard deduction, and you file the return on paper.
The first-year choice. If you fail the test in your arrival year but pass it the next year, you can choose to be treated as a resident from the first day of a 31-day stretch of presence, provided you were present for at least 75% of the days from that day to December 31 (up to 5 days away count as present). Days as an exempt individual do not count toward either test. Model it both ways before choosing.
The spouse election. If you are married to a US citizen or resident at the end of the year, the two of you can elect under section 6013(h) to file a joint Form 1040 as full-year residents. You then file no dual-status return and keep the standard deduction, at the cost of reporting worldwide income for the whole year. You make the choice for that year only, and a couple who arrived late in the year can pair it with the first-year choice. A nonresident at the end of the year who is married to a US citizen or resident makes the continuing section 6013(g) election instead, which then applies to every later year until one of you ends it.
A treaty tie-breaker. If you are a US resident under the day count and also a resident of your home country under its rules, you are a dual-resident taxpayer, and where a treaty exists the two governments have agreed in it which country treats you as its resident. To claim the other country's residence you file as a nonresident and disclose the position on Form 8833.
If you or a dependent needs a taxpayer number to file, you apply on Form W-7 alongside the return. See our ITIN page for what the application involves.
How are you taxed in the year you change from F-1 to H-1B?
From the H-1B start date you are no longer an exempt individual, and your employer starts withholding Social Security and Medicare the same day. If you are still inside your five exempt calendar years, that is also the day you start counting days toward the substantial presence test; if you had already used your five years, you started counting on January 1 of the sixth year.
Example: F-1 arrival in August 2021, H-1B effective October 1, 2025
| Period | Status | Days counted | Return |
|---|---|---|---|
| January 1 to September 30, 2025 (F-1, fifth exempt year) | Exempt individual | 0 | Form 8843 for the period |
| October 1 to December 31, 2025 (H-1B) | Nonresident, days count | 92, under 183 | Form 1040-NR for 2025, or dual-status from October 1 by first-year choice |
| January 1 to December 31, 2026 (H-1B) | Resident | All | Form 1040 |
Social Security and Medicare withholding starts on October 1, 2025. The first-year choice is available for 2025 because October 1 to October 31 is a 31-day stretch of presence and you apply the 75% test only to the days from October 1 to December 31. Had the student arrived in 2020, the five exempt years would have ended on December 31, 2024, and every day of 2025 would count.
H-1B, L-1, F-1 and J-1 tax filing: what changes by visa type
The test is the same for everyone. What differs is how quickly you pass it and what else applies.
H-1B. No exempt years. The IRS counts your days from arrival, so H1B tax filing is resident filing from your first full calendar year here, and your arrival year is a nonresident or dual-status year. An H1B tax return then looks much like a citizen's, and your employer withholds Social Security and Medicare from the first paycheck, unless a totalization agreement or another employment exception applies.
L-1. The IRS treats you the same as an H-1B holder for residency. The added questions are a foreign employer, split payroll, and continuing home-country obligations.
F-1, including OPT. Five exempt calendar years, so F1 student tax filing is a nonresident return plus Form 8843, and an F1 visa tax return uses Form 1040-NR for those years. You owe no Social Security or Medicare tax while you are a nonresident alien doing work authorized under the visa. Check your pay stub: if your employer withheld it in error, ask the employer for a refund first, and file Form 843 with Form 8316 if they do not pay it.
J-1. Two exempt years for teachers and trainees, five for students, which is why a J1 visa tax return depends on the category on your DS-2019 rather than the letter on the visa.
Does New York have its own tax residency test for visa holders?
Yes. New York has its own domicile test and its own statutory residency test, and you can be a federal nonresident and a New York resident in the same year.
The state tests domicile, or a permanent place of abode plus a day count, and New York City applies similar rules of its own. For the detail, use the 14-day rule for nonresidents for wage withholding and NYC tax for nonresidents for city residency.
Do you pay US tax on income from your home country as a visa holder?
Once you are a US tax resident, yes. Rental income, interest, dividends and gains from your home country go on Form 1040 alongside your US wages, and you claim a credit on Form 1116 for income tax you paid to the other country on that income, up to the US tax on it. In your arrival year, only foreign income you received after your residency starting date is taxable in the US, and only the foreign tax on that income is creditable.
Example: second-year H-1B holder, full-year resident in 2026, with a rental apartment at home
| Item | Amount |
|---|---|
| Net rental income, converted to dollars | $12,000 |
| Income tax paid to the home country on it | $2,400 |
| US tax on the rental income at an assumed 24% rate | $2,880 |
| Foreign tax credit on Form 1116 | $2,400 |
| US tax still due on the rental income | $480 |
Assumes a 24% federal rate and no state tax. The IRS limits the credit to the US tax on the same income, so it would credit a higher foreign tax only up to $2,880.
Do visa holders have to file an FBAR or Form 8938?
Yes, once you are a US tax resident and your accounts are large enough. You file an FBAR when the combined value of your accounts outside the US passes a threshold at any point in the year, and Form 8938 when your foreign financial assets pass separate, higher thresholds.
Penalties for missing either can far exceed the tax involved. You file the FBAR separately from the tax return and attach Form 8938 to it. Our FBAR and Form 8938 page has the thresholds.
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Send us your entry and exit dates, your visa history, and last year's return if there was one. We will run the count, tell you which return you are filing, and flag anything the state does differently. Call (212) 641-0673 or send the contact form. No charge for the conversation.
Reviewed by George Dimov, CPA, New York, NY. Serving clients in all 50 states, 15+ years advising visa holders and foreign nationals on US residency, dual-status returns, and treaty positions. President of George Dimov, CPA, a New York City firm serving clients across the five boroughs and nationwide.