Resident vs. Non-resident alien tax status for H1B first year in the US - so confused!

The distinction between resident and non-resident alien status can be tricky during your first H1B year. Here's what you need to know: For tax purposes, there are two tests to determine if you're a resident alien: the Green Card test and the Substantial Presence Test (SPT). Since you don't have a green card, we focus on the SPT. The SPT counts days you were physically present in the US: all days in the current year, 1/3 of days in the previous year, and 1/6 of days from the year before that. You need 183 days total to qualify as a resident alien. However, this is where it gets complicated for you - your F1 time might not fully count toward this test. Students on F1 visas are typically exempt from counting days for the first 5 calendar years in the US. If you were here on F1 for 2 years before switching to H1B, those F1 days might be exempt, meaning they don't count toward your 183 days. Without knowing your exact entry/exit dates, my general advice is that most first-year H1B holders who previously were on F1 end up filing as non-residents, or using the "dual-status" option for the year they switch.

I ran into exactly the same confusion last year! After getting different answers from different accountants, I finally used taxr.ai (https://taxr.ai) and it really cleared things up for my H1B situation. Their system analyzed my visa history, entry/exit dates, and previous tax filings to determine my correct status. The tool specifically handles these resident vs. non-resident determinations and explains why you qualify for a particular status. For me, I had been on F1 for 3 years before H1B, and it confirmed I needed to file as a non-resident alien since my F1 time didn't count toward the substantial presence test. What I liked is that it showed me the exact IRS rules and calculations, so I felt confident about my filing. It also helped prepare the right forms based on my status determination.

I just wanted to follow up and say I tried taxr.ai after seeing it mentioned here. I was really impressed with how it handled my complicated visa situation! I've been stressing about whether my previous J1 time counts toward the substantial presence test after switching to L1, and the tool walked me through the entire calculation. It confirmed I should file as a non-resident alien and explained exactly why - apparently my J1 was under a category that's exempt from counting days for 2 years. The system even showed me where on my visa documents to look for this information, which my previous accountant never mentioned! It also handled my wife's situation correctly (she was here on J2 and then L2) and explained how we should file. Definitely recommend it for anyone confused about resident vs. non-resident status with multiple visa types.

Has anyone tried calling the IRS directly about this resident vs. non-resident alien question? I tried for WEEKS last year and kept getting disconnected or waiting for hours. Then I found Claimyr (https://claimyr.com) and they actually got me through to an IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c My situation was similar - H1B after being on OPT. The IRS agent confirmed that I needed to file as a non-resident since my F1/OPT time didn't count toward the substantial presence test. Having that official confirmation made me feel much more confident about my filing. The service basically holds your place in line with the IRS and calls you when an agent is about to answer. Saved me so much frustration compared to my previous attempts.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I was still desperate to get answers about my visa tax situation, so I tried it anyway. I'm shocked to say it actually worked perfectly. Got connected to an IRS representative in about 25 minutes after trying unsuccessfully on my own for days. The agent was able to review my specific situation (L1 visa holder who previously had an H1B with a different employer). They confirmed I should file as a resident alien because my combined presence over the past 3 years met the substantial presence test, even with some of my student visa time being exempt. The agent even explained which specific forms I needed and how to document my status change on my return. This was way more helpful than the generic advice I was finding online. I would have filed incorrectly without this specific guidance.

Here's a tip that saved me last year: You can actually elect to be treated as a US resident for the entire year under certain conditions, even if you don't meet the substantial presence test. Look into the "First-Year Choice" election (also called the "First-Year Election"). If you're married to a US citizen or resident alien, or you meet the substantial presence test in the following year (2025), you might be eligible to choose resident status for the part of 2024 that you were present in the US. This election can be beneficial if resident status would give you better tax treatment (like claiming certain credits or deductions). I did this my first H1B year and it saved me about $3,200 in taxes.

Something nobody's mentioned yet is that resident vs. non-resident status affects how your investment income is taxed too. As a non-resident, you're only taxed on US-source income, but as a resident, you're taxed on your worldwide income. If you have investments or bank accounts back in your home country, the filing status makes a huge difference. Non-residents might avoid tax on foreign interest, dividends, etc., while residents have to report everything (though foreign tax credits can help avoid double taxation). I learned this the hard way after filing as a resident my first year when I should've been non-resident. Had to amend my return when I realized I unnecessarily reported (and paid tax on) my foreign investment income.

I went through this exact same confusion last year! After months of research and consulting multiple sources, here's what I learned that might help: The key issue is that your F1 time from August 2022 to May 2024 falls under the "exempt individual" category for the substantial presence test. Students are exempt for their first 5 calendar years, so those days don't count toward your 183-day requirement. This means you're only counting your H1B days from June 2024 onward, which is likely not enough to reach 183 days for 2024. So you'd typically file as a non-resident alien using Form 1040NR. However, definitely look into the First-Year Choice election that Mateo mentioned above. Since you'll be in the US all of 2025 on H1B, you'll likely meet the substantial presence test next year, which could make you eligible to elect resident status for part of 2024. This could be beneficial depending on your income sources and deductions. One more thing - make sure you check if your home country has a tax treaty with the US. Some treaties have special provisions for students transitioning to work visas that could affect your filing requirements. The safest approach is to run the numbers both ways (resident vs non-resident) and see which gives you better tax treatment, assuming you're eligible for the First-Year Choice election.