A resident alien is an individual who is not a U.S. citizen, but who meets either the green card test or the substantial presence test.
You meet the green card test and are a U.S. resident if you hold a green card and are a lawful permanent resident of the United States at any time during the year.
You meet the substantial presence test and are a U.S. resident if you are physically present in the United States for at least 31 days during the current calendar year, and for at least 183 days during the current calendar year and the two preceding calendar years. For purposes of meeting this test, you can only count 1/3 of your days of physical presence in the first preceding year, and only 1/6 of your days in the second preceding year.
Example of Substantial Physical Presence Test for U.S. Residents
You were physically present in the U.S. for 45 days in the current year, 180 days last year, and 240 days the year before. You meet the 31-day physical presence test for the current year, with your 45 days of presence. But you can only use 60 days from last year (1/3 of 180 days) and only 40 days from the year before (1/6 of 240). Your total (45 this year + 60 for last year + 40 for the year before = 145, which is less than the required 183 days. You would not be considered a U.S. resident for tax purposes, under the substantial physical presence test.
Closer Connection to a Foreign Country
Even if you meet the substantial physical presence test, you could still be considered a nonresident alien if:
You are present in the U.S. for less than 183 days during the current year.
You maintain a tax home in a foreign country, and
You have a closer connection to that foreign country than you do to the United States.
Tax Effect for Residents and Nonresidents
If as a result of these tests, it is determined that you are a U.S. resident, you generally have the same tax treatment as a U.S. citizen, which means that you are subject to U.S. income tax on your worldwide income, but are eligible to exclude part or all of your foreign earned income. If it is determined that you are a nonresident, different tax rules apply, and you should see IRS Publication 519. A nonresident does not qualify to exclude foreign earned income, but at the same time, a nonresident is generally only subject to U.S. income tax on U.S. source income.