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Tax Treatment Of Aliens

If you are neither a U.S. National nor a U.S. Citizen, then you are an Alien. For US tax purposes, there are two types of Aliens. They are:

  • Resident Alien
  • Non resident Alien.

Resident Aliens are taxed in the same manner as U.S. citizens – i.e. on their worldwide income – whereas Non resident aliens are taxed according to special rules contained in certain parts of the Internal Revenue Code (I.R.C.).

In general, Non resident Aliens are subject to federal income tax only on income which is derived from sources within the United States and / or income that is “effectively connected” with a U.S. trade or business.