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New York Times
4 days ago
- Politics
- New York Times
World Cup Athletes Are Among the Exceptions to Trump's New Travel Ban
President Trump signed a travel ban on Wednesday that prohibits citizens of 12 countries from entering the United States. The primarily targets nations in Africa and the Middle East. The ban, which goes into effect on Monday, bars travel to the United States by citizens of Afghanistan, Myanmar, Chad, the Republic of Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan and Yemen. And it limits travel from Burundi, Cuba, Laos, Sierra Leone, Togo, Turkmenistan and Venezuela. But there were some exceptions to the expansive order: Green card holders People with green cards — individuals who have a pathway to U.S. citizenship — are exempted from the ban. When a travel ban was introduced by Mr. Trump during his first term in 2017, chaos and confusion ensued at airports. The Department of Homeland Security had to put out a statement clarifying that green card holders could enter the country. This time, the administration is making that exemption clear in the order itself. Dual citizens People who are American citizens but also hold citizenship with a banned country will not be effected by the order. Those who seek visas through connections to an American family member Immigrants from the banned countries who seek visas through connections to their spouses, children, or parents who are American citizens will still be able to apply for them. Certain athletes Athletes and coaches traveling to the United States to play in major sporting events, along with their families, will still be allowed into the country, despite the ban. The United States is one of the hosts of the World Cup in 2026, and Los Angeles is the site of the Summer Olympics in 2028. This exception will allow soccer players from targeted countries, like Iran, to enter the United States for the World Cup. Refugees granted asylum Those who have been admitted as refugees or were granted asylum are exempted under the order. Afghans who helped the U.S. The order exempts Afghans who seek to enter the U.S. under a special visa program for those helped the U.S. government during the two decades of war after the Sept. 11, 2001, terror attacks. Iranians fleeing religious persecution Iranians who are escaping the country because they belong to a religious minority, like Christianity, are also exempted.
Forbes
20-05-2025
- Business
- Forbes
U.S. Tax Residency: Key Differences In The Income & Transfer Tax Rules
U.S. tax residency rules The application of U.S. tax laws often turns on the meaning of 'residency.' Although U.S. citizens and residents are subject to federal income taxes on their worldwide income, non-residents who are not U.S. citizens ('Foreign Persons') are generally not unless the income has a nexus to the U.S. Under the U.S. income tax regime, individuals may establish residency through their physical presence in the U.S. U.S. estate and gift tax laws—referred to as 'transfer taxes'—also apply to U.S. citizens and residents. Significantly, however, the U.S. transfer tax regime defines the term 'residency' different than its U.S. income tax counterpart. Here, individuals establish residency through a test focused on that person's domicile, regardless of physical presence. Foreign Persons are subject to U.S. income taxes on: (1) income that is effectively connected with a U.S. trade or business, or (2) U.S. source income that is fixed, determinable, annual or periodic. By comparison, U.S. residents are subject to federal income taxes on their worldwide income. Section 7701 of the Code defines the term 'resident' for U.S. income tax purposes. In addition to lawful permanent residents of the U.S. (i.e., 'green-card holders'), residents include individuals who meet the 'substantial presence test.' The substantial presence test focuses on the number of days the person is physically present in the U.S., placing more significance on the days in the current year as opposed to prior years. Specifically, individuals satisfy the substantial presence test if they are physically present in the U.S. at least: (1) 31 days in the testing year, and (2) 183 days total in a three-year lookback period which includes the testing year. For these purposes, individuals count the number of days they were physically present in the U.S. in the testing year, 1/3 of the days in the immediately preceding year, and 1/6 of the days in the year prior to the preceding year. Example Jon arrives in the U.S. in 2022. He is physically present in the U.S. the following number of days for 2022-2024: 240 days in 2022; 150 days in 2023; and 90 days in 2024. To determine whether Jon meets the substantial presence test for his 2024 tax year, Jon would make the following computation: 2022: 240 / 6 = 40 days 2023: 150 / 3 = 50 days 2024: 90 / 1 = 90 days Total = 180 days Because Jon was not physically present in the U.S. 183 days or more in the three-year window, he would not meet the substantial presence test. Note that Jon would satisfy the substantial presence test if he had been in the U.S. an additional three days or more in 2024. In addition to being subject to U.S. income tax on their worldwide income, U.S. residents are often subject to numerous foreign information return requirements including the FBAR, Form 8938, Form 3520, Form 3520-A, and Form 5471. Individuals who learned of their U.S. residency and missed foreign information returns may be able to regain compliance and pay reduced penalties under an IRS compliance program such as the IRS Streamlined Filing Compliance Procedures. Federal tax laws also impose a U.S. transfer tax upon death (referred to as an estate tax) and in making certain inter vivos gifts (referred to as a gift tax). Similar to the U.S. income tax rules above, these transfer taxes apply to U.S. citizens and residents. However, the definition of residency under the U.S. transfer tax regime differs significantly from this term's usage under the U.S. income tax laws. For U.S. transfer tax purposes, an individual is a resident—and therefore subject to tax—if the individual had domicile in the U.S. upon death or making the gift. See Treas. Reg. sec. 20.0-1(b)(1); Treas. Reg. sec. 25.2501-1(b). Thus, unlike the mechanical substantial presence test which utilizes physical presence as the proper marker, the transfer taxes focus on whether the person resided in the U.S. with an intent to remain there indefinitely. The domicile test requires an analysis of all relevant facts and circumstances, including where the individual worked, where the individual's family resided, etc. U.S. residents subject to U.S. transfer taxes may voluntarily change their domicile through relocating overseas and establishing an intent to remain in that foreign country indefinitely. But U.S. transfer taxes may continue to apply if the person maintains property in the U.S. (e.g., real property). In these circumstances, the individual, who is no longer a U.S. resident, may be subject to transfer taxes on a much reduced exemption of $60,000 (compared to the roughly $14 million exemption that applies for U.S. citizens and residents for 2025). Careful tax planning can often be key in reducing these taxes. Taxpayers who have non-U.S. citizen spouses also must be aware of a reduced marital deduction. Generally, U.S. transfer tax laws allow spouses who are U.S. citizens to receive an unlimited amount of wealth through gifts. Under section 2323(i) of the Code, spouses who are not U.S. citizens may receive an inflation-indexed exclusion of $100,000 (currently $190,000 in 2025) without gift tax consequences. Again, careful tax planning may significantly reduce the transfer taxes in these circumstances. The U.S. income tax or transfer tax applies to individuals who establish residency in the U.S. For these purposes, the U.S. income tax rules focus on an individual's physical presence in the U.S. whereas the U.S. transfer tax regime centers on domicile. Because the tests differ, taxpayers and tax professionals alike should exercise caution in separating the two tests to determine a taxpayer's tax residency status under the different tax regimes.
