Everyone who works in the United States must file taxes with the IRS. This requirement includes lawful permanent residents and nonimmigrants with U.S. employment authorization. If you intend to naturalize as a U.S. citizen eventually, you will need to provide tax returns as part of your application, so it is essential to understand your tax filing requirements. This article explains all you should know about filing tax returns for your current or upcoming naturalization application.
Written by Jonathan Petts.
Updated November 1, 2022
Tax Filing Requirements for Different U.S. Resident Statuses
In your application for naturalization, you must include supporting documents like your tax history to prove good moral character. Even if you are not currently a U.S. citizen, you still need to pay taxes depending on your residency and visa. For tax purposes, you are either a “resident alien” or a “nonresident alien.”
The Internal Revenue Service (IRS) considers you a resident alien if you meet the green card and substantial presence test. If U.S. Citizenship and Immigration Services (USCIS) allows you to permanently live in the United States with a green card, you meet the green card test. If you were in the United States for at least 31 days in the current year and 183 days in the past three years, including the current year and two previous years, you would meet the substantial presence test. If you do not meet these eligibility requirements, you are a nonresident alien for tax purposes.
Resident aliens are taxed similarly to U.S. citizens. They must report all income, including wages, compensation, interest, and dividends. They can also qualify for deductions available to U.S. citizens. On the other hand, nonresident aliens will need to file a tax return if they conducted business in the United States or meet other IRS requirements. You must file a tax return if you want any refunds or deductions. You do not need to pay the Federal Insurance Contribution Act (FICA) taxes which only apply to U.S. citizens. If you have paid FICA taxes, you qualify for a FICA tax refund. You should contact your employer or the IRS for this refund.
Tax Returns To Include in Your Form N-400 Petition
All naturalization applicants must bring certified tax transcripts to their naturalization interview for the past five filing years, or three years if they are applying based on marriage to a U.S. citizen. In addition, you will need to bring your state identification, like a driver's license, and your green card to your interview. If you traveled abroad for more than six months, but less than one year, you will also need to provide income tax returns to show you maintained permanent residency in the United States. You must give five years of tax return statements or three if you are married to a U.S. citizen.
In addition to your tax returns, you must include multiple supporting documents for your Form N-400 Application for Naturalization. For example, if you are applying based on your marital status to a U.S. citizen, you should include your marriage certificate and, if applicable, evidence of terminating prior marriages, such as an annulment decree or death certificate of a former spouse.
If you include your children on your application, you will need to provide their birth certificates and evidence you paid child support if they do not live with you. Under U.S. immigration law through the Immigration and Nationality Act (INA), you will also need to register with the Selective Service if you are a male between 18 and 26 years old.
Filing Form N-400 if Your Taxes Are Overdue
Not paying taxes may mean that you do not meet the good moral character requirement for naturalization. However, there are some exemptions. Exemptions do not apply to people who purposefully evaded tax collection. Tax evasion over $10,000 is an "aggravated felony" for naturalization purposes. Suppose the U.S. government convicts you of an aggravated felony on or after Nov. 29, 1990. In that case, USCIS permanently bars you from establishing a good moral character for immigration purposes.
When USCIS evaluates your application, they look at your federal, state, and local tax history to ensure you met your obligations over the last three or five years. However, many people with good intentions cannot pay their entire tax bill. The USCIS officer will consider the entire situation regarding your character. They may consider other factors such as your family ties and background, criminal history, education, employment history, community involvement, and length of time in the United States.
Paying Your Overdue Taxes
The best way to avoid any issues with your naturalization application is to pay your overdue taxes before starting the naturalization process with Form N-400. However, if this is impossible, you can establish a payment plan with the IRS to pay off your overdue taxes. Getting on a payment plan may help you still qualify for naturalization, especially if you submit a letter from the tax authority to USCIS. The letter should say you filed the proper forms and returns and paid the taxes or made arrangements to pay in the future.
Before filing Form N-400, it's best to file overdue tax returns and build a history of on-time payments. You should wait at least six months after your payment plan agreement and make all the payments on time. You will want to add this evidence to your application. Given your more complicated situation, you may benefit from the legal advice of an immigration lawyer or attorney.