In simple terms, under United States income tax law, a "fiscal resident" alien ("alien" means a non-United States citizen) is subject to United States income tax on his worldwide income and must comply with substantial reporting requirements, while a "fiscal nonresident" alien is only subject to tax on United States source income (with some exceptions). Whether an alien is treated as a fiscal resident of the United States depends upon his immigration status and the number of days he is physically present in the United States. If the alien is a lawful permanent resident for immigration purposes (a "green card" holder), then he is automatically a fiscal resident. If the alien is not a "green card" holder, then he will be a fiscal resident if he is physically present in the United States for 183 or more days in any calendar year. If an alien is present in the United States for more than 31 days but less than 183 days in a calendar year, a weighted formula (the "Substantial Presence Test") is applied to the current and two preceding years to determine his fiscal status in the current year. Under the Substantial Presence Test, the alien would be presumed to be a fiscal resident if the sum of (i) the number of days he was present in the United States during the current calendar year plus (ii) one-third of the number of days he was present in the United States during the immediately preceding calendar year, plus (iii) one-sixth of the number of days he was present in the United States during the second preceding calendar year equaled or exceeded 183 days. Notwithstanding the foregoing, if the alien were to be present in the United States for less than 183 days in the current calendar year and could establish (by filing a declaration with the Internal Revenue Service) that he had closer connections to and a "tax home" in the home country of the alien, then the alien would still avoid being considered a fiscal resident.

Whether the alien would be subject to worldwide income tax, therefore, will depend upon his visa status, tax home and connections thereto, and number of days present in the United States during the current and two preceding calendar years.