1.17 How a Resident Alien Is Taxed

A resident alien (1.18) is taxed on worldwide income from all sources, just like a U.S. citizen. The exclusion for foreign earned income may be claimed if the foreign physical presence test is satisfied or if the bona fide residence test is met by an individual residing in a treaty country (36.5). A resident alien may generally claim a foreign tax credit (36.14). A resident alien’s pension from a foreign government is subject to regular U.S. tax. A resident alien working in the United States for a foreign government is not taxed on the wages if the foreign government allows a similar exemption to U.S. citizens.