U.S. Tax Requirements for U.S. Tax Residents.
Olga Guzhva • January 11, 2024
When considering immigration to the United States, people often search for the ins and outs of the varied visa options, cost of leaving, education opportunities for kids, but they seldom inquire about the implications of the U.S. taxation. If you do a Google search about U.S. immigration, you’d come across a lot of information about varied visas and their eligibility requirements, the process of obtaining a green card or naturalization, and so on. The information about U.S. tax rules would not appear in your Google search unless you specifically search for it.
- As part of your immigration planning, it is very important to be aware of and understand the U.S. tax obligations, specifically if you have assets in your home country.
- Additionally, if you decide to open your new U.S. business and apply for an immigrant visa, such as EB-1 or EB-2 NIW, or a non-immigrant visa, such as E-2 or L-1, you’d also want to know what taxes you and your business entity would be required to pay.
- Even if you don’t immigrate to the United States but choose to work there based on a temporary nonimmigrant visa, you may be subject to U.S. taxation.
In general, (1) U.S. tax residents are taxed in the same manner as U.S. citizens - on their worldwide income, while (2) nonresidents are generally taxed on U.S. source income and income effectively connected with U.S. trade or business.
Income of residents is subject to the graduated tax rates that apply to U.S. citizens. Residents use the Tax Table and Tax Rate Schedules which apply to U.S. citizens found in the Instructions for Form 1040 and Form 1040-SR2.
Residency Under U.S. Tax Law
Taxation of an individual who is not a U.S. citizen or U.S. national is dependent on the residency status of such individual.
If you are a U.S. resident, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return. You must report
these amounts whether they are earned within or outside
the United States.
Note:
U.S. resident for immigration purposes is not always the same as US resident for tax purposes.
Who is the U.S. Tax Resident?
- U.S. citizen is a US resident for U.S. income tax purposes.
- An immigrant who obtains a green card is treated as a lawful permanent resident for immigration purposes and is considered a U.S. tax resident for U.S. income tax purposes.
- Foreign national could be a U.S. resident for U.S. income tax purposes under the substantial presence test.
- Foreign nationals may choose to be treated as dual status residents for this taxable year if certain tests are met. To learn more, refer to Publication 519, U.S. Tax Guide for Aliens.
- You are a dual-status individual when you have been both a U.S. resident and a nonresident in the same tax year.
- Dual status does not refer to your citizenship, only to your resident status for tax purposes in the United States.
- In determining your U.S. income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. The most common dual-status tax years are the years of arrival and departure.
When planning your immigration to the United States, smart strategic planning of your immigration process, as well as evaluating your future U.S. tax obligations, are essential to your piece of mind in avoiding any pit falls and issues in dealing with the IRS. Navigating the complexities of the U.S. immigration and tax laws often requires professional legal guidance. Seeking assistance from an experienced immigration attorney well versed in U.S. taxation can significantly enhance the chances of your successful immigration planning, ensuring compliance with these intricate regulations and requirements.
If you have any questions about what this means for you, please schedule a consultation with one of our experienced attorneys.
We look forward to working with you!
This blog is not intended to be legal advice and nothing here should be construed as establishing an attorney client relationship. Please schedule a consultation with an immigration attorney before acting on any information read here.
For individuals applying under the O-1A or EB-1A categories , both reserved for professionals with extraordinary ability, letters of recommendation are a critical part of the petition. These expert testimonial letters offer valuable insight into your accomplishments, reputation, and influence within your field. When written properly, they help demonstrate that you truly stand out as someone who has risen to the very top of your profession. Many petitions submitted by highly accomplished individuals fall short because the recommendation letters are vague, overly personal, or fail to clearly explain why the applicant meets the legal standard of extraordinary ability. That is why taking the time to prepare your recommenders effectively is not just helpful. It is essential to build a strong and persuasive case. First, it is important to help your recommenders understand the purpose of the letter . This is not a casual reference or character recommendation. It is a formal declaration to U.S. Citizenship and Immigration Services that you possess extraordinary ability in your area of expertise. The letter must describe your achievements in concrete terms and explain why your work has had a significant impact and recognition within your field. Many professionals, no matter how accomplished, are unfamiliar with the specific requirements of the O-1A and EB-1A categories. It is helpful to provide them with a short explanation of what is needed, and in some cases, a sample or outline to guide them. Selecting the right recommenders is just as critical as the content of the letters themselves. While USCIS gives greater weight to letters from independent experts, independence should not be confused with distance. The ideal recommender is someone who knows your work well and can provide specific and credible insight into your contributions, impact, and reputation in the field. A letter from someone who barely knows you, or one that focuses more on the recommender’s own accomplishments than yours, is unlikely to carry much weight with USCIS. A common mistake is submitting letters that read more like summaries of the recommender’s resume than a meaningful evaluation of your achievements. While a brief introduction of the recommender’s qualifications is important to establish credibility, the focus must remain squarely on you , your work, your innovation, and the ways in which your impact is considered extraordinary. The strongest letters go beyond general praise. They include clear and detailed examples of how your contributions have influenced others in your field or led to measurable outcomes. To make the letter as accurate and persuasive as possible, you should provide your recommenders with a summary of your most important professional milestones. This might include major awards, media coverage, patents, publications, notable leadership roles, or metrics showing the commercial or scientific success of your work. Well-prepared recommendation letters serve as both evidence and narrative. They help fulfill specific legal requirements and also tell the story of how and why your work has earned you distinction. In a category defined by terms like extraordinary ability, it is important that every part of your petition reinforces that standard. At Santos Lloyd Law Firm, we work closely with our clients and their recommenders to develop strong and compelling testimonial letters that meet USCIS expectations and highlight each applicant’s unique contributions.
Family-based immigration remains one of the most common paths to lawful permanent residency in the United States. It offers a lifeline to families hoping to reunite across borders, but the process is far from simple. The outcome of the applications can be delayed as a result of potential missteps while preparing the applications. Here are some of the most common pitfalls and how to avoid them: Incomplete or Inaccurate Forms One frequent mistake is submitting incomplete or inaccurate information on the forms like the I-130 (Petition for Alien Relative) and the I-485 (Adjustment of Status). Even minor errors such as misspelled names, missing signatures, or incorrect dates—can result in Requests for Evidence. To avoid this misstep, double-check all entries, cross-reference documents, and consult with an attorney before submission. Remember, immigration forms are legal documents so accuracy matters. Insufficient Supporting Evidence Proving a genuine familial relationship is the basis of family-based petitions. For spousal cases, USCIS looks closely at evidence of a bona fide marriage. Little or no supporting documents and evidence may lead to Requests for Evidence and even skepticism from USCIS. To establish a bona fide marriage, include documentation to show shared finances and liabilities. Filing Under the Wrong Category or Preference There are different immigration paths depending on whether the petitioner is a U.S. citizen or lawful permanent resident, and whether the beneficiary is a spouse, child, sibling, or parent. Each category has different processing times and visa availability. It is critical that before applying, you understand which preference category applies to your case. Immediate relatives of U.S. citizens (spouses, parents, unmarried children under 21) generally receive faster processing and are not subject to annual visa caps. Not Disclosing Past Immigration or Criminal History Many applicants fail to account for past immigration violations such as visa overstays, unauthorized work, or prior removal orders. Similarly, if you fail to disclose past criminal history and these issues surface later in the process they can affect the outcome of the case. Disclose everything to your attorney, no matter how minor or old the issue seems. Prior violations don’t always mean denial but not disclosing them may lead to serious consequences. If you're considering filing a family-based petition, consult with an experienced immigration attorney at our office. Our office is committed to helping families navigate this complex process with clarity and confidence.
When applying for a green card or seeking admission into the United States, one of the legal hurdles many applicants may face is the public charge ground of inadmissibility. This test evaluates whether someone is likely to become primarily dependent on the government for support. But what exactly does that mean—and what types of public benefits can trigger this issue? In this article, we’ll break down what “public charge” really means, who is affected, what types of public benefits are considered, and what immigrants should be mindful of when making decisions about public programs like Medi-Cal and Medicaid. What Is the Public Charge Ground of Inadmissibility? The public charge rule applies to individuals applying for a visa, green card (adjustment of status), or entry into the U.S., unless they fall into an exempt category. Under this rule, the Department of Homeland Security (DHS) must determine whether the applicant is likely to become primarily dependent on the government for subsistence. This typically refers to receiving: Public cash assistance for income maintenance (such as SSI or TANF), or Long-term institutional care at government expense. This determination is based on the "totality of circumstances," including age, health, financial resources, education, skills, and whether a sponsor has submitted a valid Affidavit of Support. Who Is Exempt from the Public Charge Rule? Many categories of immigrants are exempt from the public charge ground of inadmissibility. These include: Asylees and refugees Special immigrant juveniles Violence Against Women Act (VAWA) self-petitioners T and U visa applicants Temporary Protected Status (TPS) applicants Importantly, even if someone later adjusts status through a different pathway that is subject to public charge, any benefits they received while in an exempt category will not be held against them. What Public Benefits Are Not Considered in the Public Charge Test? It is a common and harmful myth that using any public benefit will jeopardize your immigration status. In fact, most non-cash benefits do not count against you in a public charge determination. According to USCIS and DHS guidance, the following types of assistance (current as of July 1, 2025) are not considered: Health-Related Benefits Medi-Cal/Medicaid, except for long-term institutional care Children’s Health Insurance Program (CHIP) Health insurance through the ACA Marketplace, including subsidies COVID-19 testing, vaccines, and treatment Community health services, crisis counseling, and short-term shelters Food and Nutrition SNAP (Food Stamps) WIC School meal programs Food banks and emergency food assistance Housing and Energy Emergency shelter Rental assistance (e.g., McKinney-Vento programs) Energy assistance (e.g., LIHEAP) Education and Childcare Public schooling Head Start Childcare subsidies (e.g., CCDF) Educational grants and scholarships Federal Cash and Tax Benefits Earned income tax credit (EITC) Child Tax Credit (CTC) Stimulus checks Unemployment insurance Social Security and veteran’s benefits Disaster and pandemic-related cash aid In short, just because a benefit is public or government-funded doesn’t automatically make it count against you. A Word of Caution About Medi-Cal and Medicaid, in Particular As of today (07/01/2025), standard use of Medi-Cal (California’s version of Medicaid) or Medicaid for most health-related services is not considered in a public charge determination. This includes preventative care, emergency services, pregnancy-related services, and short-term care. However, if Medicaid is used for long-term institutionalization, such as in a nursing home or psychiatric facility, that does count under the public charge test. Despite current guidance, we are seeing political shifts and changes in tone from the current administration that suggest public charge policies may become more restrictive in the future. This includes renewed interest in expanding the types of public benefits that may be considered, particularly around medical assistance. For that reason, we generally recommend that individuals who are applying for adjustment of status, or who may be subject to the public charge ground in the future, avoid enrolling in Medi-Cal or Medicaid at this time, unless absolutely necessary. Final Thoughts Immigration law is complex, and the rules surrounding public charge can feel confusing or even frightening. But it’s important to understand that using most public benefits—especially for food, education, and healthcare—will not automatically jeopardize your green card or visa application. Still, because policy can change quickly, we urge individuals to consult with an immigration attorney before applying for any public assistance—especially healthcare programs like Medi-Cal or Medicaid. If you have questions or concerns about how public benefits might impact your immigration case, our office is here to help. We are committed to providing up-to-date, personalized guidance to keep your immigration journey on track. Disclaimer The information provided herein is for general informational purposes only and does not constitute legal advice. Every immigration case is unique, and the application of the public charge rule may vary depending on your specific situation. If you believe this topic may apply to you or you need individualized legal guidance, we encourage you to contact one of our highly-qualified legal professionals for a consultation and assistance tailored to your circumstances. Resources: USCIS Public Charge Resources ILRC Medi-Cal and Public Charge Alert (2024) California Medi-Cal Immigrant Eligibility FAQ
