What is an 'Alien'

An alien is a person who is present in a country of which they are not a citizen. The term “alien” may refer to people who are legal residents of that country, tourists, visiting on business or violating immigration law. 

Aliens differ from citizens in the way that work regulations and tax laws apply to them. Depending on the country, aliens may require special permits to work, may be prohibited from conducting business or may have to file a tax return for income made while working outside their country of origin.

Alien in the United States describes someone who is neither a U.S. citizen or a U.S. national.  According to the IRS, a U.S. national is a person who’s “sole allegiance” is to the US. This includes citizens, as well as people born in American Samoa or the Northern Mariana Islands who have opted to be considered U.S. nationals rather than citizens. People born in Puerto Rico, Guam, and the U.S. Virgin Islands are all U.S. citizens.

BREAKING DOWN 'Alien'

Aliens file taxes in the US according to their status as either resident or non-resident aliens. To be considered a resident alien in the U.S., a person must either satisfy the green card test or the substantial presence test.

Meeting the green card test simply means that the person has been a lawful permanent resident of the US at some point during the current calendar year.  Meeting the substantial presence test is more complicated, with specific numbers of days that a person must have been present in the country for the past one and three year periods.

Generally, resident aliens pay taxes in the same way that U.S. citizens do. They report all wages and other income to the IRS through a tax return, even if that income was earned outside of the U.S. Nonresident aliens generally only pay U.S. tax on income that they earn within the U.S.

All earnings reported to the IRS must be in U.S. dollars, even if they were earned in a foreign currency.

Aliens and Work Regulations

Aliens in the U.S. must obtain one of three documents to be able to work in the country legally. They may obtain a permanent resident card, also known as a green card, a work permit, or an employment-related visa that specifies the employer they will be working for.

Aliens working in the U.S. are divided into temporary workers and permanent workers. Permanent workers may live and work freely within the U.S. Temporary workers are restricted with regard to how much they can work in the country and what type of work they may do.

Aliens simply coming to the U.S. to conduct business but not seeking employment must obtain a temporary visitor for business visa, also known as a B-1 visa.

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