IRS releases FAQs for sick foreigners claiming U.S. tax exemption

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Following the global outbreak of COVID-19, the IRS has posted FAQs for alien individuals who may have intended to leave the United States but were unable to leave due to being sick with a medical condition or problem, as described in §7701(b)(3)(D)(ii). There are certain circumstances in which non-U.S. citizens can be taxed as U.S. residents, one of which is by meeting the “substantial presence test”, which means they have been physically present in the U.S. for over a certain threshold of days. The medical condition exception is one way that individuals can exclude days that they were forced to stay in the U.S.

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Under normal circumstances, the IRS requires the individual to file Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition, including a signed statement from a physician or other medical official stating that they are unable to leave the U.S. due to a medical condition or medical problem. The IRS acknowledges that considerations are unique due to the COVID-19 emergency and the released FAQs modify the requirements for the exemption. In lieu of a physician’s statement, alien individuals can claim the 30-day exemption by retaining documentary evidence that substantiates their medical condition, their inability to leave due to medical condition, and the period of the medical condition. This can include emails, receipts, cancelled travel reservations, medical records, or other proof of exchanges with healthcare providers.

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The above information is general in nature and is not tax advice. Contact your Henry+Horne tax professional for more details. For more information and resources on COVID-19, see our coronavirus page.

Haley Braun, CPA