I am not a U.S. citizen, but I spend the winter months in Arizona. Do I have to file a U.S. tax return?
In this situation, as you are vacationing in the U.S. and you do not own any property or earn any income while present in the U.S., the requirement to file a U.S. tax return is derived from the number of days that you are present in the U.S.
If you are present in the U.S. for less than 31 days in a calendar year, you do not need to worry about any U.S. tax obligations arising from the number of days you are present in the U.S. during that calendar year.
If you are present in the U.S. for more than 31 days, but less than 183 days in a calendar year then you may meet the substantial presence test. If you meet the substantial presence test you would be considered a U.S. resident alien and be subject to U.S. tax. You will meet the substantial presence test if:
1) You spent at least 31 days in the U.S. in the current year, and
2) The total of the following formula is 183 equivalent days of more in the U.S.
a. 100% for current year
b. Plus: 1/3 for first preceding year
c. Plus: 1/6 for second preceding year
If you meet the substantial presence test and have not taken steps to become a permanent resident in the U.S. you can avoid being subject to U.S. tax by filing form 8840 (Closer Connection Exemption Statement for Aliens). This form essentially acknowledges that you met or exceeded the substantial presence test, but are not required to file a U.S. tax return because you maintain a closer connection to a foreign country and are subject to tax there.
If you are present in the U.S. for more than 183 days in a calendar year, you are considered a resident alien and will be required to file a U.S. income tax return. However, in some situations there is an election that can be made under article IV of the Canada-US tax treaty that can allow the individual to be considered a non-resident alien.
To ensure that the correct position is taken, we recommend that you consult with one of our qualified practitioners.
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