Understanding Legal Residency Status For International Students

International students on F-1 visas are considered legal resident aliens in the United States, but only for tax purposes. This means that while they are not permanent residents, they are legally residing in the country with a valid visa. After staying in the US for five years, F-1 students are considered resident aliens for tax purposes and are subject to lower federal tax but also to other taxes such as social security and FICA. However, this status is purely for tax filing purposes and does not change their non-immigrant status.

Are international students considered legal residents?

F-1 visa holders are considered legal resident aliens for tax purposes

International students in the United States on an F-1 visa are considered non-resident aliens for tax purposes for the first five calendar years of their stay in the US. This means that they are considered legal resident aliens for tax purposes after staying in the US for five years. During the first five years, F-1 visa holders are considered exempt individuals and are only taxed on their US-sourced income. After the first five years, F-1 visa holders who pass the Substantial Presence Test are considered resident aliens for tax purposes and are taxed on their worldwide income.

The Substantial Presence Test is used by the IRS to determine whether an individual who is not a US citizen or permanent resident should be taxed as a resident or a nonresident alien for a specific year. To meet this test, the person must be physically present in the US on at least 183 days during the three-year period that includes the current calendar year and the two years immediately preceding. For example, to meet the test for the 2023 calendar year, an F-1 visa holder would need to be present in the US for at least 365 days in 2023, plus one-third of the days in 2022 and one-sixth of the days in 2021, for a total of at least 365 + 60 + 30 = 455 days.

It is important to note that the term "US Resident" for F-1 students is generally used only for tax purposes and does not change their non-immigrant status. F-1 visa holders are still required to comply with the terms and conditions of their visa status, and their ability to participate in certain activities or receive benefits may be limited. Additionally, international students may benefit from tax treaties between the US and their home country, which can provide reduced tax rates or exemptions.

F-1 visa holders are not permanent residents

International students on F-1 visas are considered legal residents of the United States, but they are not permanent residents. This means that F-1 visa holders are allowed to be physically present in the US and participate in activities such as playing the lottery or winning prizes. However, their status as non-permanent residents imposes certain restrictions and limitations that distinguish them from permanent residents or citizens.

Firstly, F-1 visa holders are classified as "non-resident aliens" for tax purposes when they first arrive in the US. After residing in the US for five consecutive years, they are then reclassified as "resident aliens" for tax purposes. This change in status affects the taxes they are subject to, with "resident aliens" generally facing higher tax obligations.

Secondly, F-1 visa holders are expected to maintain a residence abroad, indicating that they do not intend to permanently reside in the US. This criterion explicitly states that F-1 visa applicants must have no intention of giving up their residence in their home country or elsewhere while studying in the US.

Thirdly, F-1 visa holders face restrictions on employment during their first academic year, with off-campus employment generally not permitted. After the first year, they may engage in specific types of off-campus employment, such as Optional Practical Training (OPT) in STEM fields or special situations like severe economic hardship. However, any off-campus employment must be related to their area of study and authorised by the Designated School Official.

Lastly, F-1 visa holders who wish to transition to permanent residency must understand their visa status and responsibilities. They cannot enter the US with the primary intent of gaining lawful permanent residency, as this would be considered immigration fraud. However, F-1 visa holders can explore options for obtaining a green card and changing their immigration status. Common ways to pursue permanent residency include self-petitioning as a person of extraordinary ability, marrying a US citizen or permanent resident, entering military service, winning the diversity visa lottery, or receiving sponsorship through family members.

F-1 visa holders can win prizes and play the lottery

International students on F-1 visas are considered "non-resident aliens" for tax purposes. However, they are still legally residing in the US as they have a valid visa. In terms of playing the lottery and winning prizes, here is some information to be aware of:

Firstly, F-1 visa holders can indeed participate in lotteries and try to win prizes. There are no specific prohibitions on these activities for F-1 visa holders, as long as they comply with all the other requirements and obligations of their visa status. However, it is important to note that any winnings may be subject to certain tax implications. For example, for prizes over $600, you may need to show ID and provide your social security number (SSN). While you are not a legal permanent resident, you are lawfully present in the US, and this allows you to participate in recreational gambling activities without worrying about your immigration status.

If an F-1 visa holder wins the Diversity Visa Lottery (DV Lottery), they will need to go through consular processing to obtain a green card, which is required for permanent resident status. This involves interviewing at a US consulate or embassy in their home country and then entering the US within six months of the visa issuance date. Alternatively, if they are already in the US when they win, they can adjust their status to permanent resident without leaving the country. However, they should be prepared to answer questions about their immigration intent and future plans at their port of entry.

It is worth noting that F-1 visa holders who win prizes may face extra barriers and significant withholding taxes. Any US lottery winnings are subject to federal and likely state withholding and income taxes. Additionally, certain kinds of gambling winnings, such as sweepstakes or poker tournaments, may be subject to federal withholding taxes of 25% if the payout meets certain criteria. Therefore, while F-1 visa holders can play the lottery and win prizes, they should be aware of the potential tax implications and ensure they comply with all visa requirements.

F-1 visa holders can become permanent residents by marrying a US citizen

International students on an F-1 visa are considered to be lawfully present in the US, but they are not legal permanent residents. They are considered "non-resident aliens" for tax purposes. After staying in the US for five years, F-1 visa holders will be considered "resident aliens" for tax purposes only.

• Get married: In some states, you can simply present yourself at the local county courthouse and get married the same day. In other states, you must prove local residency, take a blood test, or fulfill other requirements.
• Obtain a government-issued marriage certificate: The certificate that a church or temple might give you is not sufficient for immigration purposes.
• Submit paperwork: Submit USCIS Form I-130, Petition for Alien Relative, and USCIS Form I-485, Application to Register Permanent Residence or Adjust Status, along with other supporting documents.
• Attend an interview: During the interview, a USCIS official will review your paperwork and ensure that the immigrant is not inadmissible due to criminal history, health issues, or financial dependence. They will also ask personal questions to verify that the marriage is genuine and not a sham to obtain a green card.
• Receive a visa stamp: Following a successful interview, you will typically receive a visa stamp in your passport, allowing entry to the US as a permanent resident within six months.
• Obtain your physical green card: Shortly after entering the US with your visa stamp, you will receive your physical green card in the mail.

F-1 visa holders can become permanent residents by changing to a dual-intent visa

International students on an F-1 visa are considered to be legally residing in the US, as they hold a valid visa. However, they are not considered permanent residents. F-1 visa holders are considered "non-resident aliens" for tax purposes and are classified as non-immigrants.

There are several ways for F-1 visa holders to change their status and obtain a green card. One way is by marrying a US citizen or lawful permanent resident, which makes the F-1 visa holder eligible to adjust their status. However, they should be cautious of the 90-day rule, which is a guideline used to determine if a person committed immigration fraud by declaring one intent but having a different reason for entering the country. Another method is through the EB-1 visa, which is available to people with extraordinary abilities in specific fields. EB-3 visas are also an option for skilled workers and professionals, but these visas require job offers from US employers and are therefore more difficult to obtain.

Additionally, F-1 visa holders can explore the E-2 treaty trader program, which is a dual-intent visa that facilitates trade between the US and its trading partners. However, E-2 non-immigrants are prohibited from applying for a status adjustment without waiving certain legal rights provided in the trade agreement. Thus, consulting an immigration attorney is advisable.

In summary, while F-1 visa holders are not considered permanent residents, they can take steps towards becoming one by changing to a dual-intent visa and exploring various pathways, such as marriage, specialized visas, or trade programs.

Frequently asked questions