GLOSSARY
Tax residency, in plain English
The day-count rules that decide where you owe tax come with a lot of jargon. Here is what the terms actually mean.
183-day rule
A common shorthand for the day threshold at which many US states and countries treat you as a tax resident. Note that most statutes say "more than 183 days," so the real trigger is usually 184 or more; exactly 183 days generally keeps you a nonresident. The definition of a "day" and any additional requirements (such as a home there) vary by jurisdiction. See snowbirds & state movers.
Statutory residency
A mechanical test, separate from domicile, that can make you a full-year tax resident of a state where you (1) maintain a permanent place of abode and (2) spend more than 183 days in the year. Both conditions must be met, and it can apply even if your true home is in another state.
Domicile
Your one true permanent home, the place you intend to return to after being away. Unlike statutory residency, domicile is about intent rather than a day count. You can have only one domicile at a time, and it persists until you take affirmative steps to establish a new one.
Permanent place of abode
A residence suitable for year-round living that you maintain, whether owned or rented. It is one of the two prongs of statutory residency. Courts have narrowed what counts: mere ownership of a property you barely use may not qualify, and the abode generally must be maintained for substantially all of the year.
Substantial Presence Test (SPT)
The IRS test that determines US tax residency by physical presence. You meet it if you are present at least 31 days in the current year and reach 183 on a weighted three-year total: all current-year days, plus one-third of last year's, plus one-sixth of the year before. Because of the weighting, roughly 122 days a year can trigger it. Try the SPT calculator.
Closer connection exception (Form 8840)
An exception that lets someone who otherwise meets the Substantial Presence Test remain a US nonresident, if they were present fewer than 183 actual days in the current year, maintained a tax home in another country, and had a closer connection there. It is claimed by filing IRS Form 8840, and is the mechanism many Canadian snowbirds rely on.
Schengen 90/180 rule
The short-stay limit for visa-exempt travelers in the Schengen area: no more than 90 days of presence in any rolling 180-day period. The 180-day window moves, so days eventually "fall off" and free up allowance. Both entry and exit days count, and days across all Schengen countries add together. Try the Schengen calculator.
Bona fide residence (Puerto Rico)
The federal standard, under IRC 937 and IRS Publication 570, for qualifying for Puerto Rico tax benefits such as Act 60. It requires meeting three tests for the entire year: a presence test (often 183 days in Puerto Rico), a tax-home test, and a closer-connection test. Passing the day count alone is not enough. See Puerto Rico Act 60.
Any part of a day
A counting standard under which any presence during a calendar day, however brief, counts as a full day, and you need not stay overnight. New York applies it to statutory residency, so arriving late one night and leaving early the next can count as two days. SpyglassBeacon counts days this way by default.
Tax home
Generally the general area of your main place of business or employment, regardless of where you keep your family home. It is a required element of both the closer-connection exception and Puerto Rico bona fide residency: your tax home must be outside the US (or in Puerto Rico, respectively) for those to apply.
Physical Presence Test (FEIE)
A test for the Foreign Earned Income Exclusion (Form 2555): you qualify if you are physically present in a foreign country for 330 full days during any 12 consecutive months. Unlike the Substantial Presence Test, a partial day does not count; a full day is a complete midnight-to-midnight period spent abroad, and time over international waters does not count.
Not tax advice. These are general explanations; residency rules are fact-specific and vary by jurisdiction. Sources include the IRS, NY Dept. of Taxation & Finance, and the European Commission.
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