The green card test is the residency rule that treats an alien individual as a resident of the United States for federal income tax purposes because they are a lawful permanent resident at any time during the calendar year (26 U.S.C. 7701(b)(1)(A)(i)). It runs on status rather than on presence, so a person who holds the status and never sets foot in the country during the year still meets it.
That is the whole distinction from the other route to residency. The substantial presence test counts weighted days; this one reads a status and asks nothing about a calendar.
What Lawful Permanent Resident Means Here
The Code defines the status by two conditions that both have to hold at the moment being tested. The individual has the status of having been lawfully accorded the privilege of residing permanently in the United States as an immigrant in accordance with the immigration laws, and that status has not been revoked and has not been administratively or judicially determined to have been abandoned (26 U.S.C. 7701(b)(6)).
Read the second condition carefully, because it is narrower than most people assume. Leaving the country, or letting a card expire, does not by itself end the status. What ends it is revocation, or an administrative or judicial determination of abandonment.
The Treaty Route Out, and Its Third Condition
There is one further way the status stops applying, and it has three parts that all have to be satisfied. An individual ceases to be treated as a lawful permanent resident if they commence to be treated as a resident of a foreign country under a tax treaty between the United States and that country, do not waive the benefits of the treaty applicable to residents of that country, and notify the Secretary of the commencement of that treatment (26 U.S.C. 7701(b)(6)).
The third condition is the one that gets missed on a return. Treaty residence alone is not enough. Without the notification the person is still a lawful permanent resident for this purpose, whatever the treaty says.
When Residency Starts
Meeting the test does not make someone a resident for the whole year in a first year. An alien individual who is a resident under this rule for a calendar year, but was not a resident at any time during the preceding calendar year, is treated as a resident only for the portion of the year beginning on the residency starting date (26 U.S.C. 7701(b)(2)(A)(i)).
For someone who qualifies under this test and does not meet the substantial presence test, that date is specific and physical. It is the first day in the calendar year on which the person was present in the United States while a lawful permanent resident (26 U.S.C. 7701(b)(2)(A)(ii)).
So the status decides whether the test is met and the presence decides when the clock starts. Someone who received the status abroad in one year and first entered the following March is a resident from that March date rather than from the grant.
Where a US Firm Meets It
The trap is the client who says they are not a green card holder any more. The question the return depends on is not whether they still live in the country or whether the card is current. It is whether the status was revoked, or determined abandoned by an administrative or judicial process, or unwound through the treaty route with the notification actually filed.
None of those is answerable from a passport stamp or a client’s summary, and each leaves a document. Ask which of the three happened and ask to see the paper, because the alternative is filing as a nonresident on a person the Code still treats as a resident.
Common Questions
No. The test is met if the individual is a lawful permanent resident at any time during the calendar year (26 U.S.C. 7701(b)(1)(A)(i)). Days matter only for the residency starting date in a first year, and for the separate day-count route in substantial presence test.
Not on its own. The status ends for this purpose when it is revoked or administratively or judicially determined to have been abandoned (26 U.S.C. 7701(b)(6)), and an expired card is evidence of neither. Someone who fails all three residency routes is a nonresident alien instead.
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