A German postdoc who starts at Los Alamos National Laboratory on a J-1 visa in September 2024 files as a nonresident, with a two-page IRS statement attached, for her first two years. Then, on January 1, 2026, every day she spends on the Pajarito Plateau starts counting toward U.S. tax residency.
New Mexico has more people on that clock than its size suggests: lab researchers, UNM and NMSU graduate students, H-1B engineers, foreign film crews, Canadian snowbirds in Las Cruces, and workers crossing from Ciudad Juárez. Each needs to know whether the IRS sees a resident alien taxed on worldwide income or a nonresident.
How does the substantial presence test count days in New Mexico?
Under 26 U.S.C. § 7701(b)(1)(A), a noncitizen is a U.S. resident for a calendar year only through a green card held at any time that year, the substantial presence test, or the first-year election.
The test in § 7701(b)(3) requires at least 31 days here this year and a weighted total of 183. This year’s days count in full, last year’s at one-third, and the year before that at one-sixth. Any part of a day counts.
Some days never enter the formula: days as an “exempt individual,” days a medical condition that arose here kept you from leaving, foreign-to-foreign transit under 24 hours, and regular commuting days from a home in Mexico or Canada. Under Treas. Reg. § 301.7701(b)-3(e), a Juárez resident working in Santa Teresa is a regular commuter only by commuting on more than 75 percent of workdays. Excluded days also stay out of later years’ formulas, per § 301.7701(b)-3(f).
When does a J-1 researcher or F-1 student stop being exempt?
Section 7701(b)(5) treats J and Q holders (other than students) as teachers or trainees, and F, M, and student J holders as students, if the person “substantially complies with the requirements for being so present.” The regulations extend the exemption to a spouse and unmarried children under 21 whose visas derive from the principal’s.
Under § 7701(b)(5)(E)(i), a teacher or trainee is not exempt this year if exempt as a teacher, trainee, or student in 2 of the preceding 6 calendar years, and the regulation counts “any part of” a year. So a September arrival spends a full exempt year on four months here. Students get five calendar years before they must prove they do not intend to reside permanently.
A regulatory example shows the trap: three exempt student years mean no exemption in the first year as a J-1 teacher. The NMSU doctoral graduate who stays on as a postdoc gets no fresh clock.
Which forms are due, and when, for nonresidents?
Treas. Reg. § 301.7701(b)-8 requires exempt individuals to claim the exclusion on Form 8843, attached to Form 1040-NR or, if no return is due, mailed alone to the IRS in Austin by the 1040-NR deadline. Per the Form 1040-NR instructions, that deadline is April 15 for anyone with wages subject to U.S. withholding and June 15 otherwise.
A missed 8843 is not always fatal. The forfeiture rule in § 301.7701(b)-8(d) omits the teacher and student statement, though late medical and closer connection claims are lost absent clear and convincing evidence of reasonable steps to comply.
Form 8840 claims the § 7701(b)(3)(B) exception: fewer than 183 days this year, a foreign tax home, and a closer connection to that country. It is unavailable in any year you pursued a green card. Form 8833 discloses a treaty tie-breaker under Treas. Reg. § 301.7701(b)-7; omitting it risks $1,000 per failure under 26 U.S.C. § 6712. A year that switches status needs a dual-status return.
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How does the day count play out for a German postdoc at Los Alamos?
Dr. K arrives on a J-1 research scholar visa on September 3, 2024, having given up her Heidelberg apartment. Her 120 days in 2024 are exempt, so she counts zero; her 1040-NR and 8843 are due April 15, 2025. In 2025 she is present about 330 days, still exempt because only 2024 falls in the prior six years, and files the same pair by April 15, 2026.
In 2026 the exemption ends. She returns on January 4, every day counts in full, and she passes 183 days in early July, which rules out closer connection. Her residency starts January 4 under § 7701(b)(2)(A)(iii), making 2026 a dual-status year with a return due April 15, 2027. A treaty tie-breaker first requires German residence under German law, which she likely gave up with the apartment.
Her pay has a separate clock. Article 20(1) of the U.S.-Germany income tax treaty, as rewritten by the 2006 Protocol, may exempt public-benefit research pay “for a period not exceeding two years from the date of his arrival,” claimed from the employer on Form 8233 (the firm’s W-9 versus W-8 post covers the payer’s side). Amended Article 1(5)(b) keeps that benefit for residents without immigrant status, so becoming a resident does not end it; September 3, 2026 does.
What does resident alien status add beyond a bigger tax base?
The FBAR rule, 31 C.F.R. § 1010.350(b), defines a U.S. resident by reference to § 7701(b), and the IRS FBAR page requires a report once foreign accounts top $10,000 in aggregate, due April 15 with an automatic extension to October 15. Form 8938 applies to an unmarried U.S. resident with foreign assets over $50,000 at year end or $75,000 at any time. The Form 3520 instructions require reporting gifts over $100,000 from a nonresident alien individual, and § 6039F(c) charges 5 percent of the gift per month, up to 25 percent, for missing it.
In Aroeste v. United States, No. 22-cv-00682 (S.D. Cal. Nov. 20, 2023) (order), a lifelong Mexico resident with a green card claimed treaty residence in Mexico on a Form 8833 filed after his audit began. The court held that under the last sentence of § 7701(b)(6) he stopped being treated as a permanent resident, so no FBAR penalties applied, but upheld $2,000 in § 6712 penalties. The government reportedly dropped its appeal. FinCEN’s rule has not changed.
That sentence also traps long-term residents, green card holders in 8 of the last 15 taxable years under § 877(e)(2). The Form 8833 instructions warn that their treaty claim can end U.S. residency and bring tax under § 877A, which deems a covered expatriate’s property sold the day before expatriation.
Does New Mexico follow the federal residency answer?
No published Tenth Circuit decision construing the substantial presence test or a treaty tie-breaker was located on review. NMSA 1978 § 7-2-2 defines a resident as someone domiciled here during any part of the year or “physically present in this state for one hundred eighty-five days or more,” and § 7-2-3 taxes residents’ net income and nonresidents’ New Mexico income.
The German treaty covers only “the federal income taxes imposed by the Internal Revenue Code” on the U.S. side, so a scientist in Los Alamos for 300 days passes the state’s 185-day line however a tie-breaker resolves. How New Mexico then taxes her is for New Mexico-licensed counsel; the firm’s post on New Mexico residency audits covers domicile disputes.
| Status | Days counted | Usual filing | Federal status | Foreign reporting |
|---|---|---|---|---|
| J-1 researcher, years 1 and 2 | None | 8843; 1040-NR if U.S. income | Nonresident | Generally none |
| J-1 researcher, year 3 | All | 1040, often dual-status | Resident at 183 days | FBAR, 8938, 3520 |
| H-1B worker | All | 1040-NR, then 1040 | Resident at 183 weighted | Full once resident |
| Green card holder | Not needed | 1040 | Resident | Full; exit tax risk |
| Visitor over 120 days yearly | All, weighted | 8840 if needed | Nonresident if 8840 holds | None |
Frequently Asked Questions
Do J-1 researchers at Los Alamos or Sandia count days toward the substantial presence test?
Not while exempt. A J-1 researcher who substantially complies with the visa excludes days as a teacher or trainee, but loses that status after being exempt during any part of two of the six preceding calendar years. For most arrivals, every day counts from the third calendar year.
Is Form 8843 required if I had no U.S. income?
Yes, if you are excluding days as a student, teacher, trainee, or for a medical condition. With no 1040-NR to attach it to, Form 8843 is mailed alone to the IRS in Austin, Texas, by the 1040-NR due date, June 15 for someone without wages subject to withholding.
Can a Canadian snowbird in Las Cruces avoid U.S. tax residency?
Often, yes. A winter visitor whose weighted total reaches 183 but who spent fewer than 183 days here this year can stay a nonresident by timely filing Form 8840 showing a Canadian tax home and closer ties to Canada. Seeking a green card closes that route.
What is a dual-status tax return?
It covers a year split between nonresident and resident status, usually the year of arrival or departure. A person who was a resident on December 31 files Form 1040 marked as a dual-status return, attaching an unsigned Form 1040-NR for the nonresident months.
Does claiming a treaty tie-breaker end FBAR filing?
Not safely. In Aroeste v. United States, a California court held that a green card holder who claimed treaty residence in Mexico owed no FBAR penalties. That order binds no New Mexico court and FinCEN’s rule is unchanged, so filing remains the conservative course.
Does New Mexico treat me as a resident if the IRS treats me as a nonresident?
It can. New Mexico counts as a resident anyone domiciled in the state during any part of the year or physically present 185 days or more, and federal treaties address federal income taxes. A visiting researcher can be a nonresident alien federally yet meet the state definition.
How North Star Law Firm Can Help
North Star Law Firm helps foreign nationals and their New Mexico employers sort out federal residency status, catch up on Form 8843 and 1040-NR filings, and handle the foreign reporting that follows a status change, through its tax law practice, unfiled tax returns and IRS audit defense services, and exit tax and expatriation planning.
Phillip Zagotti is an Attorney and CPA admitted to practice before the Internal Revenue Service and the United States Tax Court. He is licensed by the State Bar of California and holds a Texas CPA license; he is not licensed by the State Bar of New Mexico, and the firm works alongside New Mexico-licensed counsel on state-law questions. See also the firm’s post on the October 15, 2026 FBAR deadline, or contact North Star Law Firm.