Business Without Borders – International Business and Tax Planning Blog

Posts Tagged ‘three year look back rule’

As a general rule, U.S. citizens and U.S. tax “residents” are subject to U.S. federal income tax on their respective worldwide income irrespective of source.  An individual who is neither a U.S. citizen nor resident is generally subject to U.S. income tax only with respect to certain types of U.S. source income that is either FDAP (fixed, determinable, annual or periodical) or ECI (effectively connected with a U.S. trade or business.)

The key determinant of U.S. federal income tax liability is, therefore, residence of the taxpayer.

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