Understanding Tax Obligations for Immigrants

If you’re an immigrant working in the United States, you may wonder whether you’re required to pay federal income taxes. The short answer is yes—immigrants must pay taxes just like U.S. citizens. However, they often face unique challenges, such as language barriers and navigating the tax system for the first time. With tax returns for the 2024 tax year due by April 15, 2025, this guide will help simplify the process.

Who Needs to File Taxes?

Tax obligations in the U.S. extend beyond citizens. Immigrants authorized to work in the country must pay both federal and state income taxes. The Internal Revenue Service (IRS) classifies workers as either resident or nonresident aliens for tax purposes.

  • Resident Aliens: You are considered a resident alien if you meet either of these tests:
    • Green Card Test: If you hold a green card, you are classified as a resident for tax purposes.
    • Substantial Presence Test: If you have been physically present in the U.S. for at least 31 days in the current year and a total of 183 days over the past three years, you qualify as a resident alien.

Resident aliens file taxes using the same forms as U.S. citizens.

  • Nonresident Aliens: If you do not meet either test, you are a nonresident alien. You must still file taxes if you own a U.S.-based business or earn income in the U.S. that has not been sufficiently taxed by an employer. Temporary visa holders may also benefit from filing a return if they are eligible for a tax refund.

Understanding the W-4 Form

When starting a job, your employer will ask you to complete a W-4 form, which determines the amount of tax withheld from your paycheck. The number of allowances you claim affects your tax deductions, with more allowances reducing the amount withheld.

How to File Taxes as an Immigrant

Unlike some countries where taxes are automatically deducted, the U.S. tax system requires individuals to file their own returns. Here’s what you need:

  • SSN or ITIN: You must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) to file taxes. Green card holders typically apply for an SSN, while nonresident aliens may need to apply for an ITIN using Form W-7.
  • Tax Forms:
    • Green Card Holders: File Form 1040, the same form used by U.S. citizens.
    • Temporary Visa Holders & Nonresident Aliens: Use Form 1040-NR.

Foreign Income Reporting

If you earn income outside the U.S., green card holders must report it on their tax returns. Form 2555 may allow you to exclude a portion of foreign-earned income from taxation.

Why Paying Taxes is Important

Although paying taxes does not automatically grant Social Security benefits to temporary visa holders or undocumented immigrants, it does offer advantages, such as:

  • Demonstrating compliance with tax laws
  • Strengthening “good moral character” for future green card or citizenship applications
  • Documenting work and residency history
  • Accessing tax benefits like the Child Tax Credit
  • Insurance premium tax credits for children that are U.S. citizens

Where to Get Tax Assistance

The IRS provides a Volunteer Income Tax Assistance (VITA) program for those who need help filing their taxes, including immigrants facing language barriers or financial difficulties. The IRS Free Tax Prep site can help you locate a VITA center near you.

Prior to visiting the website, review Publication 3676-B to understand the services provided by VITA. Additionally, check the list of required documents to ensure you have everything needed for your application.

Frequently Asked Questions

  • What if I don’t have a Social Security number?

    You must apply for an ITIN using Form W-7.

  • Can I claim dependents?

    Yes, if they meet IRS eligibility requirements.

  • Do I need to report income earned outside the U.S.?

    Green card holders must report worldwide income and may be eligible for tax exemptions.

Need Help Filing Your Taxes?

Navigating the U.S. tax system can be complex, especially for immigrants. If you need guidance on tax filing, deductions, or compliance, contact us for expert assistance tailored to your situation.

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