Taxation of Dual-Status Aliens (An Overview) - Golding & Golding (Board Certified Tax Specialist)

A Dual-Status Alien Tax Overview

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The United States has one of the most complicated tax systems across the globe. That is because, unlike most countries that follow a Residence-Based Taxation (RBT) tax model, the United States utilizes a Citizenship-Based Taxation model. Making matters even more complex is the fact that while in the notes it only applies to citizens, in fact, CBT applies to US citizens, lawful permanent residents, and even foreign nationals who meet the Substantial Presence Test. This can be very confusing for non-US persons who become US residents –– and especially in their first year of residence in the United States. Let’s go through some of the basics of what happens when a non-resident alien becomes a dual-status alien for tax purposes in the first year of residency.