What is the IRS Substantial Presence Test?
The substantial presence test is an IRS rule that determines whether a non-US citizen is considered a US tax resident for a given calendar year. If you pass the test, you become subject to US tax on your worldwide income — not just income earned in the US.
The test uses a 3-year weighted formula rather than simply counting days in the current year. This means time you spent in the US two years ago still counts (at a discounted rate) toward your current-year threshold.
The 3-Year Weighted Formula
+ Prior year days × 1/3
+ Year before that × 1/6
= Weighted total — must be < 183 to remain a non-resident
The Two-Part Threshold
To be treated as a US tax resident under the substantial presence test, you must meet both conditions:
- You were present in the US for at least 31 days during the current year, AND
- The weighted total (formula above) equals or exceeds 183 days
If you don't meet both conditions, you remain a non-resident alien for tax purposes.
Which Days Count?
The IRS counts each day you are physically present in the United States. This includes:
- Any part of a day (even just a few hours) spent in the US
- Days spent on US territory (Puerto Rico, Guam, etc. may be excluded)
Days that are excluded from the count include:
- Days you are in the US as an exempt individual (certain visa holders: F, J, M, Q student visas; foreign government employees on A/G visas; certain teachers/trainees)
- Days you are in the US due to a medical condition that arose while in the US (must be documented)
- Days you commute to work in the US from Canada or Mexico
What Happens If You Cross 183 Days?
If you're treated as a US tax resident, you must:
- File US Form 1040 (not 1040-NR) reporting worldwide income
- Report foreign bank accounts over $10,000 on FinCEN 114 (FBAR)
- Potentially file Form 8938 (FATCA) if foreign assets exceed thresholds
- Pay US self-employment tax (15.3%) on business income
Why International LLC Owners Need to Track This
Many non-residents who own US LLCs travel to the US for business — conferences, client meetings, due diligence. These days add up faster than you'd expect. VaultStay automatically tracks every US trip and sends you an alert when you approach the 120-day, 150-day, and 170-day marks.
Unlike a one-time calculator, VaultStay monitors your presence in real time throughout the year and projects your year-end pace — so you can book an early flight home before you have a problem, not after.