Proving the non-residency test for Streamlined Foreign Offshore

What the non-residency test asks of a US citizen or green card holder

Two things, in the same year. In at least one of the most recent three years for which the return due date, or properly applied-for extended due date, has passed, you must have had no US abode and been physically outside the United States for at least 330 full days. One qualifying year is enough.

The years tested are the same three years as the return window, which our post on which years Streamlined covers explains. Someone who moved to the UK partway through the window can still qualify on a later year. The IRS page for US taxpayers residing outside the United States (opens the official IRS page in a new tab) treats citizens and lawful permanent residents in identical terms, so a green card holder living in Britain is measured the same way as a citizen born in Ohio.

The two limbs are separate. A person who spent the whole year in Bristol but kept their abode in the US fails, and so does a person with no US ties who spent too long on American soil to reach 330 full days outside it. Form 14653, the certification signed on the Foreign route, asks for a yes or no against each covered year on the day count, and states that you must also not have had a US abode.

• One year out of the covered three is enough
• No US abode and the day count must both hold in that year
• Years tested are the same years as the late or amended returns
• Citizens and green card holders face the identical test

What counts as a US abode for Streamlined purposes

Abode means where your family, economic and personal ties are centred. The Streamlined page takes the term from the foreign earned income exclusion rules and refers readers to Publication 54 (opens the official IRS page in a new tab) for its meaning. The IRS describes abode as having a domestic rather than a vocational sense, so it is not the same as where you work.

The IRS also says two things that often reassure people in the UK. Temporary presence in the United States does not necessarily mean your abode is there. Nor does keeping a dwelling there, even where a spouse or dependants use it. A flat in New York that you still own, or regular summer visits to family, do not by themselves move your abode back across the Atlantic.

No single factor decides it, and US ties can still add up. The IRS illustrates the point with a worker abroad whose family home, bank accounts and community life remained in the US, and who therefore kept a US abode. For most people settled in Britain, with a home, job, GP, children's schools and bank accounts here, the answer is plain. Where ties are split, the facts for each year need to be written down before the certification is signed.

How a non-citizen without a green card meets the test

By not meeting the substantial presence test in at least one of the covered years. This applies to someone who is neither a citizen nor a green card holder but became a US tax resident by days, for example a British national who worked in the US for a period and kept UK accounts.

The substantial presence test (opens the official IRS page in a new tab) is met with at least 31 days in the current year and a weighted total of 183 days across three years: every day of the current year, a third of the prior year's days and a sixth of the days from the year before that. Some days are not counted, including time in transit for under 24 hours between two places outside the US and days as an exempt individual, such as certain students and teachers. Our substantial presence test guide walks through the arithmetic.

Form 14653 asks a non-citizen to attach a computation showing the test was not met, disclosing the days present in the US for the three submission years and the two years before them. The form says a submission without a complete computation is incomplete and will not qualify. The Streamlined page refers to the test itself; the closer connection exception and the treaty tie-breaker are separate mechanisms, and the page does not say how they interact with it.

• Days present in the US for each of the five years the form asks about
• The weighted total for each covered year, shown line by line
• Any excluded days, with the reason they are excluded
• Form 8843, where days are excluded as an exempt individual

How joint filers both satisfy the non-residency test

Each spouse must meet the test on their own. The IRS says that for joint return filers both spouses must meet the applicable non-residency requirement, and Form 14653 repeats it. A couple cannot rely on one spouse's year abroad to carry the other, and each spouse is measured under whichever version of the test applies to them.

Where the day counts differ, Form 14653 asks for the difference to be disclosed on the chart or in an attachment. The same is true for the narrative: if spouses filing a joint certification have different reasons for the failure to file, each spouse's reasons are given separately. Couples who travel apart, for example where one spouse spent months in the US caring for a parent, should count each person's days individually rather than assume the household figure.

Many Americans in the UK do not file jointly at all. A US citizen married to a non-US spouse normally files as married filing separately, as our post on filing status for Americans married to a non-US spouse explains, and then only the filer's own days and abode are tested. The spouse's position becomes relevant only if an election brings them into a joint Form 1040.

Which records support the day count and abode

Records that fix your dates and your home in each covered year. The IRS does not publish a list of required documents, but Form 14653 commits you to keep records of your income and assets for a set period after signing, with a longer period for the account records behind any late FBARs, and to provide them on request.

The day count is easiest to evidence from travel records made at the time. Passport stamps are often incomplete, so airline booking confirmations, boarding passes, frequent flyer statements and card transactions showing where you spent money all help. A short calendar of every US trip in each year, with arrival and departure dates and the source for each, turns scattered evidence into something an examiner can follow. Count only whole days outside the US when testing the margin, since travel days are the ones most easily argued.

Abode is shown by the shape of a life. UK tenancy agreements or mortgage statements, council tax bills, payslips or a P60, GP and school registration, and UK bank statements showing day-to-day spending all point to where ties are centred. Our IRS streamlined filing service gathers these before the certification is drafted, so that the yes or no on each year matches the narrative on Form 14653.

• Airline confirmations, boarding passes and frequent flyer statements
• A dated calendar of every US visit in each covered year
• UK tenancy, mortgage or council tax records for each year
• Payslips, P60s or employer letters showing UK work
• UK bank statements showing everyday spending in Britain

How the test applies to a US citizen in Leeds

Take a US citizen employed in Leeds, married to a British teacher, who moved from Denver early in the first covered year. That year she spent several months in Colorado winding up her lease and selling a car, so she falls short of 330 full days outside the US. In the second year she flew back for three long visits to her mother, and the count is close.

In the third year she made one short trip at Christmas. With her job, home, bank accounts and husband all in Leeds, she had no US abode, and her days outside the US clear the threshold comfortably. That single year is enough. She files as married filing separately, so only her own dates are tested, and her husband's position does not enter the certification.

Her records are a calendar of US trips built from airline emails, her UK payslips and her tenancy agreement for each year. On Form 14653 she answers no for the first year, yes for the third, and answers the second only after the airline records are checked. Her late returns, FBARs and certification then go in on the Foreign route, with no miscellaneous offshore penalty.

What happens if no covered year meets the test

The Foreign route is closed and the Domestic route may be open. The Streamlined Domestic Offshore Procedures (opens the official IRS page in a new tab) are for non-wilful taxpayers who fail the non-residency test, and they require that returns were already filed for each covered year. They charge a miscellaneous offshore penalty of 5%.

Someone who fails the test and never filed has neither Streamlined route available, and the choice moves to other options, which our post on the Streamlined routes for people behind on returns compares. Because the gap between the two routes is the offshore penalty, a borderline year is worth reconstructing with care before anyone concludes it fails. The dates move too: as each new return year passes its due date, the oldest year drops out and a newer one comes in.

The test is a matter of facts for each year, and the answer depends on them. Our individual tax returns and foreign income and FBAR work keeps later years on time once the catch-up is done, and our guide to IRS streamlined filing from the UK sets out the full sequence. You can contact US UK Tax Returns to have your dates checked against the test.