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Substantial Presence Test

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What is the substantial presence test? (SPT)

This is a test defined by the IRS to determine if a foreign national qualifies as a resident alien for tax purposes.

  • An individual who arrives on an F-1 or J-1 student visa will be exempt from counting days towards SPT for a period of five years.

Note:The five year exemption is measured from the year the individual arrives, not from the length of time the individual is in the United States. For example, if the individual arrives in the United States on December 15, 2006, she will be out of her exemption on January 1, 2011, not December 15, 2011.

  • An individual, who arrives on a non-student J or Q visa, may also be exempt from counting days towards SPT for a period of time depending upon the length of time in the United States, the purpose of the current visit, and information concerning prior visits.
  • An individual, who may arrive as a nonresident alien, can have that status changed for a number of different reasons.
  • Always make an appointment with the foreign national tax specialist in the University Payroll Department to accurately determine your correct tax status.

How can I determine if I meet the qualifications for the substantial presence test?

The substantial presence test counts the number of days over the last three years that you are physically present in the United States, using the following formula:

  1. You have 31 days at least during the current year, PLUS
  2. You have 183 days total, if you add the current year and the two preceding years, calculated as follows:
    1. all the days that you were present in this current year, PLUS
    2. 1/3 of the days you were present in the one year before this current year, PLUS
    3. 1/6 of the days you were present two years before the current year.

Example1: You are physically present in the United States for 120 days in the current year, 120 days in the one year past, and 120 days in the two years past.

120 + 1/3(120) + 1/6(120) =

120 + 40 + 20 = 180 days

Was substantial presence met?

1. Were you here 31 days during current year? YES

2. Were you here 183 days total in the last three years? NO

Since both statements must be answered YES to meet the substantial presence test; the test WAS NOT met.

Example 2: You are physically present in the United States for 180 days in the current year, and for 180 days in the one year past, but only 120 days in the two years past.

180 +1/3 (180) + 1/6 (180) =

180 + 60 + 30 = 270 days

Was substantial presence met?

1. Were you here 31 days during the current year? YES

2. Were you here 183 days total in the last three years? YES

Since both statements must be answered YES to meet the substantial presence test; the test WAS met.

Are there exceptions to these rules?

Yes! Each exception depends on the purpose of your visit, your visa type, and prior visits. The foreign national tax specialist will help you assess your status.

 

Last Edited: December 3rd, 2010