What Is the 183-Day Rule? — A Practical Explainer
Definition
The 183-day rule is a commonly used threshold for deciding whether an individual is a tax resident of a country. “Tax resident” means a person whom a jurisdiction treats as subject to its income tax rules on worldwide or local-source income. In many countries, spending 183 days or more in the jurisdiction during a relevant accounting period (often a calendar year) triggers resident status.
Why it matters
Residency determines which income is taxed and where. Being classified as a tax resident can subject you to broader filing obligations and tax on income earned both inside and outside the country. Conversely, nonresidents are typically taxed only on in-country source income.
How the rule is applied — general points
– 183 days usually equals more than half a year and is an easy bright-line test used by many countries (for example, Canada, Australia, the U.K.).
– Countries differ on details: whether they count the day of arrival/departure, whether they use calendar vs. fiscal year, and whether they include certain types of short visits.
– Some jurisdictions use a shorter or longer threshold (e.g., Switzerland may apply different day-counts or other substantive tests).
The U.S. approach: Substantial Presence Test
The United States does not simply use a single-year 183-day count. Non‑citizens and non‑green‑card holders are tested under the “substantial presence test,” which looks back three years. You are treated as a U.S. resident for tax purposes if:
1) You were physically present in the U.S. for at least 31 days during the current calendar year, and
2) Your weighted sum of days across the current year and the two previous years equals 183 or more, where:
– Days in the current year count at full weight (1 × days),
– Days in the prior year count at one-third weight (1/3 × days),
– Days in the year before that count at one-sixth weight (1/6 × days).
Days that count
Most jurisdictions count any day you are physically present for any part of the day as a day of presence. The IRS follows this rule with specific exceptions (see below).
Common exceptions (days that do NOT count for the U.S. substantial presence test)
– Commuting from a residence in another country while you travel into the U.S. for work.
– Days you are in the U.S. as a crew member of a foreign vessel.
– Days you are unable to leave because of a medical condition that arose while in the U.S.
– Certain categories of visa holders (for example, some students, teachers, and trainees) who are exempt individuals for specific time periods.
Other U.S. considerations
– U.S. citizens and lawful permanent residents (green card holders) are subject to U.S. tax on worldwide income regardless of where they live. They may still qualify for exclusions or credits for foreign-earned income if they meet separate tests (e.g., the physical presence test of 330 full days in a 12‑month period or the bona fide residence test).
– The U.S. has income tax treaties with many countries that can alter residency outcomes or prevent double taxation. Treaty tie-breaker rules can resolve conflicts when more than one country claims you as a resident.
State residency
Many U.S. states use a 183-day rule (or similar day-counts) to define state tax residency. States vary widely in how they count days — for example, New York can treat any time spent there (even part of a day) as a day for residency purposes, with special rules for commuters and other exceptions. Always check state-specific rules.
Checklist: Steps to determine tax residency using the 183-day concept
1. Identify the country (or countries) where you spent time during the relevant tax year(s).
2. Check whether that country uses a 183-day rule or a different residency test.
3. Count days present according to that country’s rules (include or exclude arrival/departure days per local guidance).
4. For the U.S., apply the substantial presence formula: current year + 1/3 prior year + 1/6 second prior year, and ensure you meet the 31-day minimum.
5. Review visa status and any exceptions that could exclude days of presence.
6. Check tax treaties and state rules that could modify residency or tax liabilities.
7. If there’s ambiguity, document travel dates and consult a tax professional or official guidance for the relevant jurisdictions.
Worked numeric example (U.S. substantial presence test)
Scenario: You visited the U.S. for 120 days in 2025, 90 days in 2024, and 60 days in 2023. Were you a U.S. resident under the substantial presence test in 2025?
Calculation:
– 2025 (current year): 120 days × 1 = 120
– 2024 (prior year): 90 days × 1/3 = 30
– 2023 (second prior year): 60 days × 1/6 = 10
Weighted sum = 120 + 30 + 10 = 160 days
Result: 160 < 183, so you would not meet the substantial presence test for 2025 (and thus would not be treated as a U.S. tax resident by this test), assuming no other factors or exceptions apply.
Notes and caveats
– Counting errors are common. Keep precise travel records (passport stamps, boarding records, travel itineraries).
– Meeting a day-count test does not automatically end the inquiry; many countries allow other residency criteria (domicile, permanent home, habitual abode) or use tie-breaker rules in treaties.
– Special exemptions exist (students, diplomats, crew, etc.).
– State rules can create tax obligations even if you are not a federal resident.
Key takeaway
The 183-day concept is a widely used starting point to determine tax residency, but the precise outcome depends on local laws, exceptions, multi-year formulas (as in the U.S.), state rules, and international tax treaties. Always verify counting rules for each jurisdiction involved.
Reputable sources
– Internal Revenue Service (IRS) — Substantial Presence Test: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
– U.S. Internal Revenue Code & Publications (general tax residency guidance): https://www.irs.gov/
– OECD — Model Tax Convention and Residence Issues (background on international tax residency concepts): https://www.oecd.org/tax/treaties/
– U.K. HM Revenue & Customs — Statutory Residence Test (example of a multi-factor residency test): https://www.gov.uk/government/organisations/hm-revenue-customs
– Canada Revenue Agency — Residency for tax purposes: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/residency-status.html
Educational disclaimer
This article is for general informational and educational purposes only. It does not constitute legal or tax advice. For guidance tailored to your specific situation, consult a qualified tax advisor or the official tax authority for the relevant jurisdiction.