What is the Substantial Presence Test?
The Substantial Presence Test is an IRS criteria to determine tax residency status. It calculates if a non-U.S. citizen meets the physical presence requirement (at least 31 days in current year and 183 days over 3 years using weighted calculation). This calculator helps determine if you qualify as a U.S. resident for tax purposes by counting days present in the United States during the current year and two preceding years with specific weightings.
Substantial Presence Test Calculator
Calculation Formula
Advantages and Disadvantages
Advantages:
1. Provides clear IRS compliance guidelines for determining tax residency status.
2. Automates complex calculations reducing human error potential.
3. Helps avoid dual taxation issues through accurate residency determination.
4. Saves time compared to manual calculations.
5. Useful for immigration planning and tax compliance.
6. Helps identify filing requirements for foreign nationals.
7. Assists in determining tax treaty eligibility.
8. Provides immediate results for financial planning purposes.
Disadvantages:
1. Doesn't account for all IRS exceptions (students, teachers, etc.).
2. Relies on accurate day-counting which can be subjective.
3. Doesn't consider visa status or immigration intentions.
4. May create false sense of compliance without professional advice.
5. Doesn't account for partial days or transit days.
6. No provision for treaty-based residency elections.
7. Doesn't consider special circumstances like medical conditions.
8. Potential misinterpretation of "days present" definition.
9. Doesn't account for COVID-19 related exceptions.
10. May not reflect recent changes in tax laws automatically.