What is the First-Year Choice election?
A tax election under Section 7701(b)(4) letting you be treated as a US tax resident for part of the
year in which you arrived, even if you don't meet SPT that year. You back-date your residency
start to your earliest 31-day continuous stay.
When does it help?
Usually when: - You arrived mid-year on H1B or L1 - Your post-arrival income benefits from US
standard deduction - You're married to a US resident and want MFJ via §6013(g) - You expect
full US residency next year.
Doesn't help when: - You have substantial pre-arrival Indian income you'd rather not report -
Your Indian tax rate is higher than US (FTC would zero out US tax anyway).
What are the conditions?
You must satisfy ALL of: 1. NOT a US resident in the immediately preceding year 2. Will meet
SPT in the year following the election year 3. Present in the US for 31+ consecutive days in the election year 4.
Present in the US 75%+ of days from start of 31-day period through year-end.
How do I make the election?
Attach a statement to your Form 1040 declaring First-Year Choice. Paper filing often required for
the election year. Cannot be revoked.
How does it combine with §6013(g)?
If married to a US person, combine First-Year Choice + §6013(g) to file MFJ as full-year
residents. Strongest combination for NRI couples where one spouse is already a US resident.
What's the trade-off?
Report worldwide income from residency start date (start of 31-day period) through year-end.
Pre-residency Indian income remains untaxed in the US.
Worked example
Arjun arrived US on H1B Nov 15, 2025. 47 days in 2025, all Nov-Dec. Doesn't meet SPT for
2025. Will be US-resident all 2026.
Options: - No election: File Form 1040-NR for 2025. Only US wages (Nov-Dec) taxed. - FirstYear Choice: File dual-status return — non-resident Jan-Nov 14, resident from Nov 15. - FirstYear Choice + §6013(g): Treat as full-year resident, file MFJ. All 2025 worldwide income taxed by US, but FTC + larger standard deduction usually offset.
Explore our complete US Tax Return Guide to understand refunds, filing rules, and IRS procedures for NRIs.