Do I have to file a U.S. tax return?

Tax residency in the United States is decided by a formula, not by your immigration status. People routinely file the wrong kind of return because they assume the two are the same thing.

Deadline

15 April for the previous calendar year

Tax year

1 January to 31 December, always

Cost to file

Free for most low and moderate incomes

Extension

Six months to file — but not to pay

Resident or non-resident for tax

You are a resident for tax purposes if either applies:

• You are a lawful permanent resident (green card holder) at any point in the year, or
• You meet the substantial presence test: at least 31 days in the U.S. this year, and 183 days counting this year in full, one third of last year, and one sixth of the year before.

Otherwise you are a non-resident, filing Form 1040-NR and taxed only on U.S. income.

Some categories — students on F and J visas among them — are "exempt individuals" whose days do not count toward the test for a period of years. This is one of the most commonly misapplied rules, and it changes which form you file.

The year you arrive is the awkward one

The year you move is frequently a dual-status year: non-resident for the part before you arrived, resident afterwards. It has its own rules, its own restrictions on which deductions you may claim, and it is the year most likely to be filed wrongly by software designed for people who have always lived here.

Married couples have a choice here worth understanding, because electing to be treated as a resident for the whole year can substantially reduce the bill — or increase it, if there is significant foreign income. This is the single best year to use free professional help rather than guessing.

Which form, and which software

Most consumer tax software prepares only resident returns. Filing a 1040 when you should have filed a 1040-NR is the standard error, and it is not a harmless one: it can produce a refund you were not entitled to, which is then recovered with interest, and it creates a record of a filing that misstated your status.

Establish which category you are in before choosing how to file, not after.

Filing when you owe nothing

You should usually file even if your income is below the threshold. Filing is how you claim a refund of tax withheld from your pay, how you claim credits such as the Earned Income Tax Credit or the Child Tax Credit, and how you create the record of tax compliance that immigration applications ask about.

If tax was withheld from your pay all year and you never file, that money simply stays with the government. There are people owed four figures who have never claimed it.

Free help

• VITA — IRS-run free tax preparation for low-to-moderate incomes, run by trained volunteers, often with speakers of your language
• IRS Free File — free filing software above and below certain income levels
• University international student offices, which usually provide non-resident filing software

Ask a VITA site in advance whether they handle non-resident returns; not every site is certified for them, and the ones near universities usually are.

If you have not filed for past years

Late filing is fixable and much better done voluntarily. Where a refund was due there is usually no penalty at all — and refunds can generally still be claimed for up to three years, after which the money is gone for good.

Where tax is owed, penalties accrue on the unpaid amount, and the IRS offers instalment agreements; see what to do if you owe tax and cannot pay. Consistent filing history matters for naturalisation, so gaps are worth closing.

Once you know you must file, your first tax return covers what to gather, and checking your withholding stops the same surprise recurring next year.