New to the US? First-Year Tax Responsibilities for Immigrants

Summary

The IRS's own guidance for new immigrants starts with a concept that surprises many arrivals: residency. A green card holder is generally a US resident for tax purposes and is taxed on worldwide income much like a US citizen, with residency typically beginning on the first day of the calendar year in which lawful permanent resident status was approved — or, for those approved abroad, the first day of actual residence in the United States. Nonresident aliens, by contrast, are generally taxed only on US-source income and income effectively connected with a US trade or business. Which category you fall into, and the exact date it starts, determines the scope of the very first return.

Yet filing is only part of the picture. Newcomers are simultaneously navigating Social Security numbers, opening bank and investment accounts, and deciding what to do with assets left behind in their home country. The USCIS newcomer guide treats taxes as one strand of a broader settling-in process, while practical money-management guides aimed at Chinese-speaking newcomers approach the same moment from an investor's perspective. Both make the same implicit point: rules first, asset allocation second. For those arriving from Canada, savings and retirement accounts opened up north add their own layer, since US rules treat them differently than Canadian rules do.

Sources

Our Take

In our cross-border practice, first-year mistakes are rarely arithmetic — they are about status and disclosure. New immigrants often assume tax residency begins only once they feel settled, when in law it can attach from the green card date. Assets left at home can carry separate reporting obligations, and the accounts newcomers open in the US deserve the same scrutiny as the ones they left behind: convenient is not the same as tax-efficient, and some foreign-held structures interact awkwardly with US rules.

Because the residency start date, disclosure obligations and account structure are decisions that echo into later years, we recommend working with a CPA familiar with cross-border issues before the first filing deadline. Keep statements from accounts held before arrival, note the key dates of your immigration timeline, and let the first return set a clean baseline for every year that follows.

Disclaimer: This article is general information only and does not constitute tax advice; it should not substitute professional tax counsel. Please consult a licensed CPA for advice specific to your situation.