Whether you owe US tax on your worldwide income or only on your US income depends on the US tax residency tests. Two tests decide it for each calendar year: the green card test and the substantial presence test. Exempt student days, the closer connection exception and the India and Canada treaty tie-breakers feed or override them. For an H-1B worker from Pune, a TN professional from Toronto or a Canadian snowbird in Florida, the day count comes first.
Which US tax residency tests apply to you?
Under IRS Publication 519, a non-citizen is a nonresident alien unless one of two tests is met for the calendar year:
- Green card test: you were a lawful permanent resident at any time in the year.
- Substantial presence test: you were present in the United States long enough under the 31-day and 183-day formula.
Three overrides exist: the first-year choice, the closer connection exception and a treaty tie-breaker. If neither test applies you stay a nonresident, taxed only on US-source income and income connected with a US trade or business.
How to run the substantial presence test
- List every day you were in the United States this year and in the two years before. Any day you are present at any time during the day counts.
- Remove days that do not count: regular commuting from Canada or Mexico (more than 75% of workdays in your working period), transit under 24 hours between two foreign places, days you could not leave because of a medical condition that arose in the United States, and exempt-individual days.
- Check the 31-day minimum for the current year.
- Add the weighted total: current-year days, plus one-third of last year's days, plus one-sixth of the year before's.
- If the total is 183 or more, you meet the test and are a resident unless the closer connection exception applies.
Exempt individuals: whose days do not count
| Group | Visa | Days are exempt when |
|---|---|---|
| Students | F, J, M, Q | You comply with visa rules and have not been exempt for any part of more than 5 calendar years, unless you show no intent to stay permanently |
| Teachers and trainees | J, Q | You were not exempt as a teacher, trainee or student in 2 of the 6 prior calendar years (limited exception if a foreign employer paid all compensation) |
| Foreign government-related | A, G (not A-3 or G-5) | Always, while temporarily present |
| Immediate family | F-2, J-2 and similar | Their status derives from the exempt person |
H-1B, L-1, O-1, TN and H-4 days are not exempt. Claim exempt days on Form 8843; our students and scholars guide shows how.
When your residency starts and ends
- Substantial presence: residency generally starts on your first day of presence in the year. You may ignore up to 10 days of earlier visits if you had a foreign tax home and a closer connection to that country, and you file a signed statement.
- Green card: residency starts on the first day you are present as a lawful permanent resident.
- First-year choice: if you fail both tests for 2025 but will meet the substantial presence test for 2026, you can elect residency for part of 2025. You need 31 consecutive days of presence and presence on at least 75% of the days from that period's start to December 31 (up to 5 days of absence count).
- Ending residency: a green card is abandoned only when you file Form I-407 or a letter with your card attached, or an order issues. Until then you stay a resident for tax purposes, even if the card looks expired. Long-term residents may face expatriation rules under Form 8854.
The year residency starts or ends is usually dual-status, covered in our first-year return guide.
Closer connection exception and Form 8840
Even if you meet the substantial presence test, you may be treated as a nonresident if all three hold:
- You were present fewer than 183 days in the current year.
- You maintained a tax home in a foreign country for the whole year.
- You had a closer connection to that country than to the United States.
The IRS weighs your permanent home, family, belongings, bank accounts, driver's licence, voting and social ties. You cannot claim it if you applied for permanent residence or have an adjustment pending. File Form 8840 with Form 1040-NR by its due date; without a timely Form 8840 the exception is lost unless you show by clear and convincing evidence that you took reasonable steps to comply. Canadian winter visitors should read the snowbird and Form 8840 guide.
Treaty tie-breakers for India and Canada
If you are a resident of both the United States and a treaty country under each country's domestic law, the treaty residence article decides. Both treaties use this ladder:
- Where you have a permanent home available. If you have one in both or in neither, go to the next step.
- Where your personal and economic relations are closer (centre of vital interests).
- Where you have a habitual abode.
- Your citizenship.
- If still unresolved, the two governments settle it by mutual agreement.
The India treaty places this in Article 4(2) and the Canada treaty in Article IV(2). If you claim treaty residence abroad you file Form 1040-NR with Form 8833; failing to report a required treaty position can cost $1,000 per failure. Treaty status does not remove your FBAR duty. See the three-country tie-breaker guide and the residency tests compared.
Documents and deadlines
- Bring a three-year travel record (I-94 history, boarding passes or an employer log), visa papers and green card dates.
- For a closer connection or treaty claim, add proof of foreign ties: lease or deed, family location, bank records and licence.
- Form 8843, Form 8840 and residency statements are due on the Form 1040-NR due date: April 15, 2026 for a 2025 return with wages subject to withholding, June 15, 2026 otherwise. With no return to file, mail them to the Austin, Texas address in the form instructions.
- A late filing generally forfeits exempt days or the closer connection claim, subject to the clear-and-convincing-evidence relief.
Worked examples
Meera, TN professional from Toronto. Days in the United States: 60 in 2023, 150 in 2024, 200 in 2025. For 2025 she counts 200 + 50 + 10 = 260. She meets the test, and with 200 days in 2025 she cannot use the closer connection exception.
The Singh family, Calgary snowbirds. 125 days in each of 2023, 2024 and 2025. For 2025: 125 + 41.67 + 20.83 = 187.5. They meet the formula, but with fewer than 183 days in 2025 and a Canadian tax home they can file Form 8840 and stay nonresident.
Sai, F-1 student from Hyderabad. He arrives in August 2022 and is exempt for calendar years 2022 through 2026. From 2027 his days count unless he shows he does not intend to remain permanently.
Country notes
| Point | USA | Canada | India |
|---|---|---|---|
| Basis | Green card or 3-year weighted day count | Residential ties and days of stay | Days of stay in the financial year |
| Period | Calendar year | Calendar year | April 1 to March 31 |
| Guide | This page | Canadian residency rules | Indian residency rules |
You can be resident in all three countries in one year, so your Indian CA and Canadian CPA must apply their own tests to the same facts.
Mistakes to avoid
- Forgetting that the two earlier years count at a fraction.
- Skipping Form 8843 because no tax is due.
- Claiming a closer connection with a green card application pending.
- Assuming an expired green card ended residency.
- Claiming a tie-breaker without Form 8833.
How we can help
Our firm, serving Aurora and the Fox Valley, runs the day count with you, decides the correct status and prepares Forms 8843, 8840, 8833 and the return. We coordinate with your Canadian CPA or Indian CA so the three residency conclusions fit together. See our cross-border tax and relocation and immigration tax planning pages. We do not give immigration advice.
Frequently asked questions
Does a green card make me a tax resident from the day it is approved?
Residency starts on the first day you are present as a lawful permanent resident. If you were already resident earlier in the year under the substantial presence test, the earlier date applies.
Do H-4 spouses count days?
Yes. H-4 dependents of H-1B workers are not exempt, so every day counts.
Do treaty tie-breakers apply to green card holders?
A green card holder who claims foreign residency under a treaty tie-breaker is treated as a nonresident for computing US tax, but must file Form 1040-NR with Form 8833, and immigration and expatriation consequences may follow.
Where do I send Form 8843 if I have no return?
To the Austin, Texas address in the Form 8843 instructions, by the Form 1040-NR due date.
Official sources
- IRS: Publication 519, U.S. Tax Guide for Aliens (2025)
- IRS: Instructions for Form 1040-NR (2025)
- IRS: United States-India income tax convention (full text)
- IRS: United States-Canada income tax convention (full text)
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.