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Why does my residency starting date matter so much in my arrival year?

Your residency starting date is the line that separates the income the U.S. can tax from the income it can't in your first year. Before that date you're a nonresident alien taxed only on U.S.-source income; from that date forward you're a resident alien taxed on worldwide income. Under the Substantial Presence Test, the start date is generally your first day of U.S. presence in the year you meet the test; under the green-card test, it's the first day you're a lawful permanent resident. Getting it right determines whether foreign salary, interest, or capital gains earned earlier in the year are taxable. A few days' difference can change your filing status and your bill. Document your exact entry date and visa status, and use it consistently across your federal and state returns.

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