Closer connection exception
An exception to the US Substantial Presence Test for non-citizens with stronger ties to a foreign country. Filed via Form 8840.
Even if you meet the Substantial Presence Test, you can avoid US tax-resident status by claiming the closer-connection exception on Form 8840. Eligibility requires: (1) US presence under 183 days in the current year, (2) a foreign tax home for the entire year, (3) a closer connection to that foreign country than to the US, and (4) no application for or holding of a green card. The IRS examines more than 20 factors and routinely audits closer-connection claims.
Related terms
Contact period (Ohio)
Ohio-specific residency unit: a portion of two consecutive days during which you were in Ohio overnight.
Center of vital interests
A tax-treaty tie-breaker step: where your personal and economic ties are stronger when both countries claim you.
Contemporaneous records
Records made at or near the time of the events they describe. In a residency audit they are far more credible than a log rebuilt at tax time.
Casa habitación
Mexican tax-residency concept: a home maintained in Mexico that triggers residency, broader than 'principal residence'.
Convenience of employer rule
A state rule taxing non-resident remote workers as though the work happened in the employer's state. Used by NY, NJ, NE, PA, DE, AR and OR, and by CT in part.
Bona Fide Residence Test
An IRS test for the Foreign Earned Income Exclusion: bona fide residence in a foreign country for an uninterrupted tax year.
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