Federal Income Taxes and Noncitizens: Frequently Asked Questions

Summary

This report answers frequently asked questions about noncitizens and federal income taxes. Noncitizens may be subject to U.S. income taxes when, for example, they work in the United States or they live abroad but have U.S. source income. Noncitizens who may be subject to U.S. income taxes include

legal permanent residents (LPRs or green card holders) who are authorized to live and work in the United States permanently;

aliens who are authorized to stay in the United States temporarily, and may or may not be authorized to work;

aliens who are not authorized to be in the United States (called unlawfully present aliens for purposes of this report); and

foreigners who are outside the United States but have U.S. tax obligations.

This report groups similar questions by category: questions concerning residency status for purposes of the Internal Revenue Code (IRC); questions related to individual taxpayer identification numbers (ITINs), which are ID numbers issued to noncitizens for tax-filing purposes; and questions regarding unlawfully present aliens and federal income taxes. The report also refutes a persistent rumor that there are special tax benefits for aliens starting businesses in the United States.

The report focuses on federal income taxes. Other taxes, such as payroll taxes, excise taxes, and estate and gift taxes, are outside the scope of this report. For information on aliens and the federal estate and gift taxes, see CRS Report R43576, Estate and Gift Taxes for Nonresident Aliens, by Emily M. Lanza.