For tax purposes, an alien is anyone who is not a U. S. citizen. Like anyone else who lives or works in Minnesota, aliens must pay state income tax if they meet the filing requirements. The amount and type of their income that’s taxable depends largely on whether they are classified as “resident” or “nonresident” aliens.
The information below will help you determine if you’re a resident or nonresident alien and what forms you need to file. For more-detailed information:
Are you a resident alien?
A resident alien is treated as permanent resident, with income generally taxed in the same way as for U.S. citizens. You’re considered a resident alien if you meet the “green card” test, the “substantial presence” test or (in some cases) if you’re married to a U.S. citizen, as outlined below:
- “Green card” test: You’re considered a resident alien if you have a “green card,” which indicates you have been granted “permanent residency” status by U.S. Citizenship and Immigration Services.
- “Substantial presence” test: You’re considered a resident alien if you’ve lived in the U.S. for at least 183 days during the current year, and for at least a part of the two preceding years. However, if you have a student visa, you’re considered a nonresident alien for the first five years of your stay in the U.S.
- Married to a U.S. citizen: If you’re a nonresident alien married to a U. S. citizen, you may specify that you want to be treated as a resident alien if you file a joint income tax return with your spouse.
Filing as a resident alien
A resident alien is subject to the same filing and tax requirements as any U. S. citizen. If you are required to file a federal income tax return, you must also file a Minnesota return, as follows:
Are you a nonresident alien?
You’re considered a nonresident alien if you don’t meet either the green card or substantial presence test. Nonresident aliens typically include college students or teachers, household workers, farm workers and people in technical occupations.
A nonresident alien is taxed differently and isn’t eligible for certain state and federal tax credits. Some of the key differences include:
- Filing status for married nonresident aliens: If you and your spouse are both nonresident aliens, you must each file a separate Minnesota return and choose “married/filing separate” for your filing status. (On federal returns for nonresident aliens, there is no “married/filing jointly” option unless one spouse is a U.S. citizen.)
- State tax deduction: Nonresident aliens may not take the standard deduction on their federal return(s). Instead, you are limited to itemized deductions when figuring your taxable income. On your federal return, you may deduct Minnesota income taxes that you paid – but you must add the deduction back to taxable income on your state return.
- Credits: Nonresident aliens don’t qualify for either the federal Earned Income Credit or the Minnesota Working Family Credit. Single or qualifying widow(er) nonresident aliens may qualify for the Child and Dependent Care Credit or the Education Credit. However, married nonresident aliens cannot qualify for those credits – or for the Marriage Credit – because they must each file separate state returns.
Filing as a nonresident alien
If you’re a nonresident alien and are required to file a federal income tax return, you may also have to file a Minnesota return, as follows:
Can a nonresident alien qualify for the state Property Tax Refund?
The state Property Tax Refund is a credit, based on household income and the amount of property taxes paid while renting or owning a home in Minnesota.
The refund is available to everyone who qualifies. This includes nonresident aliens who can’t be claimed as a dependent on another person’s tax return and lived or spent at least 183 days in Minnesota during the year.
- You’ll need a copy of Form CRP, Certificate of Rent Paid (if a renter) and/or your Property Tax Statement (if a homeowner).
- When figuring your total household income on your Form M1PR, you must include income that isn’t included on federal Form 1040NR such as: interest, scholarships, and wages excluded due to federal tax treaty benefits.
- You may be able to increase the amount of your refund by claiming a subtraction from household income based on the number of your dependents (they must be U.S. citizens, or residents of Canada or Mexico). You also may claim a subtraction if you or your spouse are age 65 or older, or disabled.
For more information on the Property Tax Refund: