First year resident alien questions

[amarkhel]

• Hello. I moved to the USA last October, so non-resident alien for previous year. Till May 2024 I had only foreign income, starting from May I became employed by US company. I have 2 questions about foreign earnings when I will file tax return.

1) is the rate for foreign income(salary) is the same as for us income? I mean, if I received 40k as foreign and 70k as domestic(total income is 110k) so in this case my effective rate will be calculated based on 110k? Or are there some special rules and rates for foreign sources?

2) Let's say I received my salary for December 2023 at January 2024(year I became resident alien) from foreign source. Should I include that income to the total calculation for the year or not? Technically, I had earned it in previous year(non resident alien) just paid in 2024(resident alien). 

Thanks!

[pk]

@amarkhel , not knowing which country you are from will limit my answer  ONLY to generalities  ( no tax treaty conditions considered ).  Ditto for visa  on which you entered the country. 

(a) assuming that this was your first entry with  the three year period ending with 2023,  and entering October of 2023, you would be a Non-Resident Alien for the tax year 2023..

(b) In such circumstances i.e. Non-Resident Alien ( NRA ) for the year 2023,   ONLY your US sourced income is taxable for  that calendar year.   When the  income was received  ( i.e. constructively received ) would dictate  whether  it gets counted as 2023 or 2024 income.  For example if the income  for work done during 2023 was  issued  in 2023 but actually received by you in 2024, then  it could be claimed  as constructively  received in 2023.  Thus it is important to understand the exact facts and circumstances.

(c)  for the year 2024 your  immigration status  is determined by passing the SPT  ( Substantial Presence Test ) for the year -- all days  present in the current year ( 2024 ) + 1/3rd the days present in the  first prior year  (2023) + 1/6th  days present in the 2nd. prior year  (2022)  being equal or greater than 183 days.   Once you pass  SPT, you are a Resident for Tax purposes for the whole year starting with the first day you were present in the current year.

(d) Note that while you are present in the USA,  income for any work executed/done is sourced to USA.  Thus if during  say November of 2023, while you were living in the USA, if you worked remotely for any employer in your "Old " country, that income would be considered US sourced income and taxed as such.

Does this answer your questions ?

Is there more I can do for you ?