Taxes

Substantial Presence Test (SPT)

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Substantial Presence Test. Pursuant to the substantial presence test, a foreign citizen is considered tax resident in the United States in the event that:

It is present on the national territory for at least 183 days during a calendar year;

Spends in the United States a period of time of at least 31 days in the reference calendar year, satisfies the 183-day test (183-day test, better known as the cumulative presence test) and has a closer connection with the United States than another foreign country.

As regards the 183-day test or cumulative presence test, it consists of the sum of the total days in which the natural person was present in the United States in the reference calendar year, plus a third of the days in which he was present during the previous year and one-sixth of the days of the previous year.

If the sum thus obtained is equal to or greater than 183 days, the person is considered to be fiscally resident in the United States.

Example of SPT

In the examples below, “Tizio”, an Italian citizen, satisfies the substantial presence test in all three cases and, as such, is a resident alien.

Example 1

PeriodPresent days the USAPercentage%Days for testing purposes
Current year183100%183
1st previous year033.30
2nd previous year016.670
Total  183

Example 2

PeriodPresent days the USAPresent days the USADays for testing purposes
Current year122100%122
1st previous year12233.340.66
2nd previous year12216.6720.34
Total  183

Example 3

PeriodPresent days the USAPresent days the USADays for testing purposes
Current year60100%60
1st previous year36033.3120
2nd previous year18016.673
Total  183

For the purposes of the test, a fraction of a day spent on American soil is counted as a full day. Article 7701 tattoos:

For example, if Tizio arrives in the United States on a Wednesday afternoon to leave the following morning, for the purposes of the test, he is present for two days (Wednesday and Thursday).

It follows that it is the applicant’s responsibility to prove a closer connection with a foreign country. Whether in that country he has the main centre of his business and economic interests, as well as of his personal relationships.

The regulation in art. 301.7701 provides a non-exclusive list of indicators of a closer connection with a foreign country.

In the United States, like many other countries, including Italy, the foreign citizen is allowed to use any broader means of documentary or demonstrative evidence, aimed at establishing his closer connection with a foreign state.

In order to benefit from this exception, like the one granted to athletes, students, professors, trainees, or individuals unable to leave the United States due to their physical condition, taxpayers must complete and submit Form 8840 or 8843.

The aforementioned Models must be attached to the tax return if the subject is obliged to make it. If, in light of the claimed exception, the subject deems to be exempt from this charge, the model must still be sent to the IRS.

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