Western governments consider an individual that was ordinarily resident to remain a resident unless they have taken the specific steps required to change their residential status to a new country. Larger countries can afford the infrastructure and staff that comes from such efforts and monitoring, but small nations generally cannot. as I am still on H1b and technically not a green card holder or citizen of USA or is it going to be USA as I have been living in the US for the past 5 years on h1b.. thank you! They may also apply for tax credits in the same way that US citizens would, including credit for the elderly and disabled, child tax credit and foreign tax credit.Whereas a resident alien must report income from all sources, both inside and outside the US, a non resident alien is only required to report and therefore pay tax to the IRS on income earned within the US.The IRS can’t demand that a non resident alien pays tax on any income earned in a foreign country.USCIS (US Citizenship and Immigration Services) and the IRS hold different definitions of alien classification.For immigration purposes only, USCIS define a resident alien as a non-US citizen who lives in the US, as either a:This definition is not used by the IRS when it comes to calculating your tax classification, only by USCIS to identify which foreign nationals have lawful US permanent residence.As an H1B holder, you do not have lawful US permanent residence, therefore in the eyes of USCIS, you are not a resident alien. This is both much more difficult to do now than it once was and a route that is much more likely to be found out, thanks to information sharing treaties. How To Change Country Of Residence? Many of them choose to travel and see the world. For this couple, moving from their home country and becoming tax resident in a new jurisdiction saved their family more than one million pounds in tax! However, the IRS have a different definition of ‘resident alien’.The IRS definition of a resident alien is a non-US national, residing in the US, who satisfies the requirement of either the green card test or the substantial presence test.If you have been granted lawful US permanent residency, you will be deemed to have passed the green card test.As an H1B visa holder, you will not have been granted US permanent residency and therefore cannot be seen to pass the green card test.This is the test that will generally be relevant to H1B status holders.The parameters of this test are tied to calendar years. This is the case with the United Kingdom, and also in other countries. With the exception of just a few countries in the world – most notably the United States – income and capital gains taxes are applied in the country in which a person is considered to be normally resident. Your personal situation is very important in this calculation, which is why you are reminded once again to take individual advice. To pass the substantial presence test, you must be able to evidence that you have:The calculation for arriving at the total number of days is all of the days in the current year + one third of the days in the year immediately before + one sixth of the days in the year before that = total number of days.So, for example, if you were present in the US on a H1B visa for the following:210 (all days in 2018) + 100 (one third of the days in 2017) + 15 (one sixth of the days in 2016) = 325You were present in the US for more than 31 days in the current year and more than 183 days over the last 3 years so, in this scenario, you would pass the substantial presence test and be categorised as a resident alien.Where you enter the US on one type of visa before subsequently changing to an H1B visa, this may affect whether your physical presence in the US counts towards the substantial presence test.For instance, if you entered the US on an F1 visa, then switched over to an H1B visa, the calculation could look like this:Your eligible physical presence in the US that can be counted towards the substantial presence test is therefore 90 days.