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Definition

Nonresident Alien

Nonresident Aliens are individuals who have not qualified to acquire a green card or pass the substantial presence tests. In the United States of America, they may be obligated to pay income taxes even if they're not eligible for citizenship. Nonresident aliens must typically pay income tax on earnings received, earned or obtained in the United States.

It may be easier to understand the nonresident and resident aliens side-by-side. Both do not hold a US citizenship or green card but they are classified differently, solely depending on their period of stay inside the US national border.

As a nonresident alien, resolving US taxation can be difficult, particularly if you are unaware of Internal Revenue Service (IRS) laws and regulations. In the case of nonresident aliens' tax levels, it may vary based on their type of income. Wages, for example, are taxable at the very same rates for all United States citizens. On the other hand, investment income is taxed at the rate of 30% unless a tax treaty permits a low-range rate.

It can be a rather derogatory term that offends the addressed and USA is planning on dropping the term - “Alien” from their national documentations and general usage. Immigrants can hope for more welcoming terms once it’s replaced.

 

For example, a visiting scholar from Europe took a course at a US college for the summer. The considerable participation for resident/nonresident criteria is not met when the lecturer comes to the United States for the first time before even the beginning of this semester in August and departs at the end of the term in December. 

But if the scholar agrees to visit every year to conduct classes, the tax situation may differ but after three years, this foreigner has spent over 183 days in the United States and may fulfill the residency requirements of a nonresident alien.

 

Use of the Term in Sentences

  • The term “Nonresident Alien is generally used to indicate foreign individuals who didn't receive the green card and haven’t stayed in the US for long enough.

 

Category: Economics, Sociology
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