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Are you a possible tax resident in the USA? Find out what the IRS says in these COVID-19 times

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With the Coronavirus pandemic, many citizens of other countries have remained stuck on US soil for long periods of time due to the flight restrictions and closing of some borders.  However, these travel restrictions could result in an individual becoming a US tax resident.

In view of this situation, in April, the Internal Revenue Service – IRS issued some administrative rules to prevent citizens trapped in the USA from running the risk of becoming unplanned tax residents as a result of the pandemic.

The Revenue Procedure 2020-20 allowed an individual to exclude up to 60 consecutive days from their substantial presence test. Eligible for this exception are individuals who (1) were not permanent US residents at the end of fiscal year 2019, (2) who are not legal permanent residents at any time in 2020, (3) who were present in the United States in each of the days of the COVID-19 emergency period, and (4) who did not become a US resident in 2020 as a result of their days of presence in the United States outside of the COVID-19 emergency period.

How to request a travel exemption

Eligible individuals that need to fill out form 1040-NR for the 2020 fiscal year must request their exemption by attaching form 8843 “Statement for Exempt Individuals and Individuals With a Medical Condition” together with their tax return.  For those who do not need to submit a tax return, they must be prepare to fill out form 8843, if requested by the IRS

If you have any doubts, get in touch with the professionals at Drummond Advisors to help you.