Tax filing for part year permanent resident

[nrsa2000]

Hello,

I got my green card last year and immigrated to US at the end of March 2011. I was working in India during Jan to March in 2011 before I immigrated and received salary at this time. This has been taxed there and I have already filed tax return in India till March 2011 because the financial year ends in March.

Now for filing tax return in US, to compute gross world-wide income, do I need to add this Indian salary that I received before becoming permanent resident? Please advise.

Thanks in advance.

[Jeff4cpa]

Generally, if you were present in the U.S. for 183 days in the current year or 183 days in the combined prior three years then you file your return as a U.S. resident or citizen under the substantial presence test. Exceptions are for teacher/trainees, students, etc.

The residency starting date for an alien who satisfies both the substantial presence test and the green card test is the earlier of the first day the individual is physically present in the U.S. as a lawful permanent resident or the first day during the year that the individual is present for purposes of the substantial presence test. Reg. 301.7701(b)-4(a).

Assuming you are on H-1 or L-1 and not married to a U.S. citizen or person treated as a U.S. citizen for tax purposes, and you meet the substantial presence test using the combined three year period, then your question is whether to include your Indian March Fiscal Year End income and foreign taxes paid in your U.S. Calendar Year End return. There are two ways that tax practictioners approach this situation. One is to annualize your Indian return and include either income from Jan - Mar or 1/4 of Apr to Mar. The other is to treat the entire fiscal end in the calendar year that it lands in.