Tax and residency

Substantial presence test

Also called SPT.

The substantial presence test is the day count at 26 U.S.C. 7701(b)(3) that makes a foreign national a United States resident for income tax purposes: at least 31 days of presence in the current year, and 183 days across three years counting the current year in full, one third of the first preceding year and one sixth of the second. No green card is needed to meet it.

What it decides

Meet the weighted 183 day count, with at least 31 days in the current year, and the person is a resident alien taxed on worldwide income whatever visa they hold. 26 U.S.C. 7701(b)(3)(D) and 26 CFR 301.7701(b)-3 exclude days as an exempt individual, meaning foreign government related people, teachers or trainees, students and certain athletes, plus days a medical condition arising in the United States prevented departure, days in transit between two points outside the country and days a regular commuter from Canada or Mexico works in the United States. Visitor days on a B-1 or B-2 are not excluded, so an EB-5 investor who travels often while the petition is pending can become a United States tax resident years before approval. The closer connection escape at 7701(b)(3)(B) needs presence under 183 days in the current year plus a tax home and a closer connection abroad, and 7701(b)(3)(C) shuts it off for any year in which the person had an adjustment of status application pending or took other steps to apply for permanent residence.

Governed by 26 U.S.C. 7701(b)(3): the count at (b)(3)(A) and its multiplier table, the closer connection exception at (b)(3)(B), the bar on that exception at (b)(3)(C), and excluded days at (b)(3)(D), read from the govinfo US Code text of 26 U.S.C. 7701 on 5 August 2026. Excluded days in full at 26 CFR 301.7701(b)-3(a) and (b), read from the eCFR renderer API for title 26. The IRS page Substantial presence test, last reviewed or updated 14 March 2026, carries the day count and the list of excluded days but does not carry the 7701(b)(3)(C) bar, which is why the statute is cited here rather than that page.

Where this is explained properly

Pages here that go into substantial presence test rather than mentioning it.

U.S. Taxation 101 for New EB-5 Green Card Holders

Related terms

Residency starting dateThe residency starting date is the day a foreign national becomes a United States resident for income tax purposes, so that worldwide income is taxed from that day on: the first day of presence as a lawful permanent resident under the green card test, the first day of presence in the year under the substantial presence test, or the earlier of the two where both tests are met.
Worldwide incomeWorldwide income is the rule that a United States resident for tax purposes, including a green card holder whose residence is still conditional, is taxed on income from every source anywhere in the world and not only on income arising inside the United States.
Nonresident alien and resident alienResident alien and nonresident alien are the two United States income tax statuses a non-citizen can hold: a resident alien is taxed on worldwide income and files Form 1040, while a nonresident alien files Form 1040-NR and is taxed only on income effectively connected with a United States business and on United States source passive income.
Pre-immigration tax planningPre-immigration tax planning is the practitioner label for steps an intending immigrant takes before the residency starting date, after which the same steps are taxed as those of a United States resident.
Adjustment of statusAdjustment of status is the process under 8 U.S.C. 1255 by which someone already in the United States becomes a permanent resident without leaving, on Form I-485, instead of collecting an immigrant visa at a consulate abroad. An EB-5 investor who adjusts is granted conditional permanent residence for two years, the same status a consular applicant receives on admission.

Checked against primary sources on 10 August 2026. Back to the glossary