What's the difference between a resident alien and a nonresident alien for U.S. tax purposes?

A resident alien is taxed by the U.S. much like a citizen: on worldwide income, using Form 1040, with access to the standard deduction and most credits. A nonresident alien is taxed only on U.S.-source income and certain U.S.-connected business income, files Form 1040NR, and generally can't claim the standard deduction (with limited exceptions, such as students from India under a treaty). You become a resident alien by meeting either the green-card test or the Substantial Presence Test. This status is purely a tax concept and is separate from your immigration status, so you can be a nonresident for immigration but a resident for taxes, or the reverse. Getting this classification right determines which form you file and how much of your income the IRS can reach. If you're unsure which category fits your year, walk through wealthserene.com/assessments/immigrant-readiness.