Understanding Non-Resident Status for U.S. Tax Purposes: Green Card and Substantial Presence Tests
A non-resident for U.S. tax purposes does not meet either the Green Card or Substantial Presence Test.
Green Card Test: You are a non-resident if you do not hold a U.S. Green Card.
Substantial Presence Test: You are considered a non-resident if you were present in the U.S. for less than 31 days in the current year and less than 183 days over the past three years (with a specific formula for counting days).
Non-residents are generally taxed only on their U.S. foreign income, which includes income sourced within the U.S.
Under the Double Taxation Avoidance Agreement (DTAA) between India and USA, you may be able to claim a Foreign Tax Credit for NRIs in USA to avoid being taxed twice on the same income.
It is important to understand the tax filing for NRIs in USA and use resources like the income tax calculator to estimate your tax obligations. Additionally, you might need to comply with the FBAR filing for Indian-origin US taxpayers if you have foreign financial accounts.
Also Read: Do I need to pay tax on Indian income in the USA?