Tax residence in the United States for Pakistani taxpayers

The United States taxes citizens and green-card holders on worldwide income wherever they live, and others who meet the substantial presence test. Pakistan may still treat you as resident under s. 82 of the Income Tax Ordinance, 2001. The Pakistan–U.S. Convention of 1957 has no tie-breaker: a dual resident stays resident in both countries, and double tax is relieved by credits.

Check your status: Pakistan and United States

Free, no sign-up, about 3 minutes. Conclusion under Pakistan's Income Tax Ordinance, 2001, compared with the law of the United States and the tax treaty.

When United States treats you as a tax resident

The United States taxes its citizens on worldwide income regardless of where they live.

A green card makes you a U.S. resident for tax purposes even if you live abroad, until the status is revoked or abandoned.

The U.S. counts days over three years: all days in the current year, one third of the days in the previous year and one sixth of the days in the year before that.

You are a U.S. citizen — the United States taxes your worldwide income wherever you live. The 1957 Pakistan–U.S. Convention does not change that: a U.S. citizen cannot be a «resident of Pakistan» under it (Art. II(1)(i)).
You held a green card this year — under § 7701(b) you are a U.S. resident regardless of how many days you spent in the United States.
Your weighted days over three years reach 183 — you meet the substantial presence test and are a U.S. resident.

When you are a nonresident

You do not meet the substantial presence test and have no green card — you are a nonresident alien. The U.S. taxes only your U.S.-source income and income connected with a U.S. business (including pay for work done in the U.S.).
Your days in the U.S. as a student, teacher, trainee or diplomat do not count — you are a nonresident alien.
Fewer than 183 days this year and a closer connection to another country (closer connection exception, Form 8840) — you are a nonresident alien.

Where the rules of the United States clash with Pakistani tax rules

Collision: the 1957 Convention has no tie-breaker — you stay resident in both countries. Under the Pakistan–U.S. Convention a «resident of the United States» must not be resident in Pakistan, and a «resident of Pakistan» must not be resident in the United States (Art. II(1)(h)–(i)); there is no article that assigns a dual resident to one country. If Pakistan treats you as resident (183 days, the citizen rule or a government posting) and the United States does too (citizenship, green card or substantial presence), both tax your worldwide income. Double tax is relieved only by credits: the United States credits Pakistani tax on Pakistan-source income (Art. XV(1); Form 1116), and Pakistan credits U.S. tax on U.S.-source income (Art. XV(2); s. 103) — salary for work in the U.S. on which U.S. tax was withheld and paid is exempt in Pakistan (s. 102). If you are still taxed twice, you may present the facts to either tax authority, which «shall endeavour» to agree on avoiding it (Art. XVI(2)); they do not decide your residence.
Pakistani citizen living in the United States: when Pakistan lets go. As a Pakistani citizen you stop being resident in Pakistan only if, in the Pakistani tax year (1 July – 30 June), you spent fewer than 183 days in Pakistan, more than 182 days in the United States (or another single country) and are a resident taxpayer there (s. 82(d)). The United States counts days per calendar year (with weighted prior years), so one Pakistani tax year spans two U.S. years. Proof of U.S. residence is IRS Form 6166 (requested on Form 8802); keep a day-by-day travel record as well.

What else to know

U.S. citizens and green-card holders are taxed on worldwide income wherever they live. The United States taxes its citizens and lawful permanent residents (green-card holders) on worldwide income regardless of where they live, and others who meet the substantial presence test. A Pakistani–U.S. dual citizen living in Pakistan therefore files Form 1040 every year; double tax is relieved mainly by the U.S. foreign tax credit for Pakistani tax (Art. XV(1) of the Convention; Form 1116) or the foreign earned income exclusion.
Green-card holders: no treaty route to U.S. non-residence. A green card makes you a U.S. resident for the whole calendar year regardless of days. Many U.S. treaties let a dual resident be treated as a resident of the other country under a tie-breaker and file as a nonresident (Treas. Reg. § 301.7701(b)-7); the Pakistan–U.S. Convention has no tie-breaker, and a person resident in the United States for U.S. tax purposes cannot be a «resident of Pakistan» under it (Art. II(1)(i)). As long as you keep the green card you remain taxable in the United States on worldwide income. Status ends only when it is revoked or formally abandoned (Form I-407); if you held it in at least 8 of the last 15 years, ending it is an expatriation under § 877A, possibly with exit tax.
Short work visits to the United States: Art. XI. If you are resident in Pakistan and not resident in the United States, pay for services performed in the United States is exempt from U.S. tax if you are there on a temporary visit for no more than 183 days in the U.S. taxable year, the work is done for or on behalf of a resident of Pakistan, and the pay is subject to Pakistan tax (Art. XI(2)). Note that the substantial presence test can make you a U.S. resident with fewer than 183 days in the current year (weighted days of the two prior years count) — you then lose the Art. XI exemption, because a U.S. resident cannot be a «resident of Pakistan» under the Convention.
Pakistani students, trainees and teachers in the United States. A Pakistani resident temporarily in the United States solely as a student, or as a grant recipient for study or research from a Pakistani religious, charitable, scientific or educational organisation, is exempt from U.S. tax on remittances from abroad for maintenance and study and on up to USD 5,000 a year of pay for personal services (Art. XIII). A teacher visiting for up to two years to teach at a U.S. educational institution is exempt on the teaching pay (Art. XII). Days as an exempt F, J, M or Q visa holder also do not count for the substantial presence test.
Pakistani government employees posted to the United States. An employee or official of the Federal or a Provincial Government of Pakistan posted abroad stays resident in Pakistan (s. 82(c)), and the government salary is Pakistan-source income (s. 101). Art. IX(2) of the Convention exempts from U.S. tax remuneration paid by the Government of Pakistan to certain Pakistani citizens — check its conditions, and the rules for diplomats and consular staff, with your mission.
U.S. residents: reporting Pakistani bank accounts (FBAR, Form 8938). If you are a U.S. resident (citizen, green-card holder or under the substantial presence test) and the combined value of your foreign financial accounts — for example Pakistani bank accounts — exceeds $10,000 at any time in the year, you must file an FBAR (FinCEN Form 114) electronically; it is due April 15 with an automatic extension to October 15. Form 8938 is also required when specified foreign financial assets exceed the thresholds for your filing status and place of residence.
Year of arrival or departure: dual status in the U.S., no split year in Pakistan. A non-citizen who becomes or stops being a U.S. resident during a calendar year may be a dual-status taxpayer, resident for part of the year only. Pakistan has no split year: your Pakistani status is fixed for the whole tax year (1 July – 30 June). A Pakistani citizen who leaves Pakistan during a tax year and stays abroad for the rest of it is exempt in Pakistan on salary earned abroad in that year (s. 51(2)).
No U.S.–Pakistan social security (totalization) agreement. The United States has no totalization agreement with Pakistan, so U.S. social security and Medicare taxes on work in the United States apply under U.S. law and no certificate of coverage can exempt a posted worker. U.S. citizens and residents also owe self-employment tax on net self-employment earnings of $400 or more.

How dual residence is resolved

If both countries treat you as a resident, Art. II(1)(h)–(i) (no tie-breaker) of the treaty applies: Convention between the United States of America and Pakistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Washington on 1 July 1957. The tests are applied in order — permanent home, centre of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities.

Terms you will come across in the United States

substantial presence test: U.S. residence test: 183 weighted days over three calendar years (current year in full, 1/3 and 1/6 of the two prior years)
green card: lawful permanent resident status — U.S. tax residence regardless of days
Form 1116: U.S. foreign tax credit form, used to credit Pakistani tax
Form 6166: IRS certification of U.S. tax residency
FBAR: report of foreign bank accounts above $10,000 (FinCEN Form 114)
nonresident alien: a non-citizen taxed only on U.S.-source income (Form 1040-NR)

Questions

Which treaty applies between Pakistan and the United States?

The Convention signed at Washington on 1 July 1957, in force since 21 May 1959. It defines a resident of each country as someone not resident in the other and has no tie-breaker for people resident in both.

I have a green card and spend most of the year in Pakistan — which country taxes me?

Both, if Pakistan treats you as resident (for example 183 days there). The Convention cannot make you a non-resident of either; the U.S. credits Pakistani tax on Pakistan-source income and Pakistan credits U.S. tax on U.S.-source income (Art. XV).

Is there a U.S.–Pakistan social security agreement?

No. The SSA list of totalization agreements does not include Pakistan, so U.S. social security and Medicare taxes on U.S. work apply under U.S. law.

Sources

Legislation and official guidance

Treas. Reg. § 1.1-1(b) — U.S. citizens, wherever resident, are liable to income tax on income from all sources.
26 U.S.C. § 7701(b) — An alien is a U.S. resident for a calendar year if he or she is a lawful permanent resident (green card) at any time in that year, meets the substantial presence test, or makes the first-year election.
Treas. Reg. § 301.7701(b)-1(b) — A lawful permanent resident (green-card holder) is a U.S. resident for the calendar year regardless of the number of days spent in the United States.
§ 7701(b)(3)(A); Treas. Reg. § 301.7701(b)-1(c) — Substantial presence test: at least 31 days in the current year and at least 183 days counting all current-year days, 1/3 of the days in the first preceding year and 1/6 of the days in the second preceding year. Fractions are not rounded.
§ 7701(b)(5); Treas. Reg. § 301.7701(b)-3 — Days are not counted for 'exempt individuals': foreign-government-related individuals (diplomats), students on F, J, M or Q visas (generally up to 5 calendar years), and teachers or trainees on J or Q visas (unless exempt in 2 of the prior 6 years). The list is exhaustive.
IRS Publication 519, U.S. Tax Guide for Aliens — Official IRS guide for aliens: residence tests, exempt individuals, closer connection exception, dual-status years, dual-resident taxpayers.
§ 7701(b)(3)(B)–(C); Treas. Reg. §§ 301.7701(b)-2, -8 — Closer connection exception: fewer than 183 days in the current year, a tax home in a foreign country for the whole year, a closer connection to that country, and a timely Form 8840; not available if you applied for a green card (e.g. Form I-485).
Art. II(1)(h)–(i) Pakistan–United States Convention (1957) — «Resident of the United States»: an individual resident in the United States for U.S. tax purposes and not resident in Pakistan for Pakistan tax purposes. «Resident of Pakistan»: a person (other than a U.S. citizen or U.S. corporation) resident in Pakistan for Pakistan tax purposes and not resident in the United States for U.S. tax purposes. The Convention has no tie-breaker article: a person resident in both countries under their laws is a treaty resident of neither.
Art. XV Pakistan–United States Convention (1957) — Para. 1: subject to the Internal Revenue Code, Pakistan tax on Pakistan-source income is allowed as a credit against U.S. tax on that income (the second sentence on tax-sparing was not ratified — Senate reservation). Para. 2: subject to Pakistan income tax law, U.S. tax paid by a person resident in Pakistan on U.S.-source income is credited against Pakistan tax on that income. Para. 3: pay for personal services is sourced where the services are performed.
26 U.S.C. §§ 901, 904; IRS — Foreign Tax Credit: how to figure the credit — The credit cannot exceed total U.S. tax multiplied by foreign-source taxable income over total taxable income; it is figured on Form 1116; unused foreign tax can be carried back to the previous year and forward 10 years.
Art. XVI(2) Pakistan–United States Convention (1957) — The taxation authorities may consult together; where a taxpayer claims that he has been or may be subjected to double taxation, he may present the facts to the taxation authorities of either State, which, if the claim has merit, shall endeavour to come to an agreement with a view to avoiding the double taxation in question.
Income Tax Ordinance, 2001, s. 103 — A resident taxpayer gets a credit for foreign income tax on foreign-source income equal to the lesser of the foreign tax paid and the Pakistan tax on that income (average Pakistani rate × net foreign-source income), computed separately for each head of income; unused credit is not refunded, carried back or forward; the foreign tax must be paid within two years after the end of the tax year.
Income Tax Ordinance, 2001, s. 102 — Foreign-source salary received by a resident individual is exempt if the individual has paid foreign income tax on it; tax is treated as paid if it was withheld by the employer and paid to the revenue authority of the country where the employment was exercised.
Income Tax Ordinance, 2001, s. 82(d) (inserted by the Finance Act, 2022; consolidated text amended up to 30.06.2026 listed by FBR) — A citizen of Pakistan is also a resident individual if he or she is not present in any other country for more than 182 days during the tax year, or is not a resident taxpayer of any other country. Applies from tax year 2023.
IRS — Form 6166, Certification of U.S. tax residency — Form 6166 is a letter on U.S. Treasury stationery certifying U.S. residence for income tax purposes, used to claim treaty benefits; it is requested on Form 8802.
Treas. Reg. § 301.7701(b)-7; 26 U.S.C. § 6114 — An alien dual resident who claims treaty residence in the other country computes U.S. income tax as a nonresident (Form 1040-NR with Form 8833) but is treated as a U.S. resident for other Code purposes; the claim may affect immigration status.
26 U.S.C. § 877A(a)(1), (g)(1)–(5) — An 'expatriate' is a citizen who relinquishes citizenship or a long-term resident (as defined in § 877(e)(2)) who ceases to be a lawful permanent resident within the meaning of § 7701(b)(6). All property of a covered expatriate is treated as sold on the day before the expatriation date.
IRS, Instructions for Form 8854 (2025) — Long-term resident: a lawful permanent resident in at least 8 of the last 15 tax years; a long-term resident who begins to be treated as a treaty resident of another country and does not waive treaty benefits expatriates. Covered expatriate tests (2025): average annual net income tax over $206,000 for the prior 5 years, net worth of $2 million or more, or failure to certify tax compliance on Form 8854; 2025 exclusion from deemed gain: $890,000.
Art. XI(2) Pakistan–United States Convention (1957) — A resident of Pakistan is exempt from U.S. tax on pay for personal (including professional) services performed in the United States in a taxable year if he is present there on a temporary visit for not more than 183 days in aggregate during that year, the services are performed for or on behalf of a resident of Pakistan, and the pay is subject to Pakistan tax. Para. 1 gives the mirror rule for U.S. residents working in Pakistan (financial year).
Arts. XII–XIII Pakistan–United States Convention (1957) — Art. XII: a professor or teacher resident in one State who temporarily visits the other to teach for not more than two years at a university, college, school or other educational institution is exempt there on the teaching pay. Art. XIII(1): a resident of one State temporarily present in the other solely as a student or as the recipient of a grant for study or research from a religious, charitable, scientific or educational organisation of the first State is exempt there on remittances from abroad for maintenance and study and on up to USD 5,000 per taxable year of pay for personal services.
Income Tax Ordinance, 2001, s. 82(c) — An individual is a resident individual for a tax year if he or she is an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year — regardless of days in Pakistan.
Art. IX Pakistan–United States Convention (1957) — Para. 1 exempts from Pakistan tax remuneration paid by the U.S. Government to U.S. citizens not ordinarily resident in Pakistan; para. 2 gives a corresponding exemption from U.S. tax for remuneration paid by the Government of Pakistan to certain Pakistani citizens; para. 3: not for services in connection with a trade or business carried on for profit.
IRS Publication 54 (12/2025), Tax Guide for U.S. Citizens and Resident Aliens Abroad — Filing rules are generally the same at home and abroad; automatic 2-month extension (June 15) for those living outside the U.S. and Puerto Rico with their main place of business or post of duty outside; interest runs from the regular due date; § 911 is claimed on Form 2555; no credit or deduction for items related to excluded amounts; FBAR required if foreign accounts exceed $10,000 in aggregate (due April 15, automatic extension to October 15).
26 U.S.C. § 6038D; IRS — Do I need to file Form 8938? — Taxpayers living abroad (bona fide residence or 330-day presence): more than $200,000 on the last day of the year or more than $300,000 at any time (married filing jointly: $400,000 / $600,000).
Income Tax Ordinance, 2001, s. 51 — (1) A citizen who becomes resident in a tax year after being non-resident in the four preceding tax years: foreign-source income is exempt in that tax year and the following one. (2) A citizen who leaves Pakistan during a tax year and remains abroad for the rest of it: salary earned outside Pakistan in that year is exempt.
SSA — U.S. International Social Security Agreements — The SSA list of totalization agreements in effect (Italy, Germany, Switzerland, … Iceland; Romania from 1 Sep 2026) does not include Pakistan or Ukraine (checked 30 Oct 2026).
26 U.S.C. § 911(a), (c), (d)(1), (d)(4), (d)(6) — A qualified individual with a foreign tax home may elect to exclude foreign earned income and a housing cost amount (self-employed: housing deduction). Qualified: a U.S. citizen who is a bona fide resident of a foreign country for an uninterrupted period including an entire tax year, or a U.S. citizen or resident present abroad 330 full days in 12 consecutive months. Time requirements may be waived for departures due to war or civil unrest. No credit or deduction is allowed to the extent allocable to excluded amounts.
IRS — Figuring the foreign earned income exclusion — Maximum exclusion: $130,000 for 2025 and $132,900 per person for 2026. Housing amount limitation (generally 30% of the maximum exclusion, adjusted by location): $39,000 for 2025, $39,870 for 2026.
26 U.S.C. § 1411; IRS — Questions and Answers on the Net Investment Income Tax — 3.8% on net investment income above MAGI of $200,000 (single), $250,000 (married filing jointly), $125,000 (married filing separately); amounts excluded under § 911(a)(1) are added back to MAGI; nonresident aliens — including dual residents claiming treaty nonresidence — are not subject.
26 U.S.C. §§ 871, 1441; IRS — Taxation of nonresident aliens — Income effectively connected with a U.S. trade or business (including wages for services in the U.S.) is taxed at graduated rates; fixed or periodic income (interest, dividends, rents, royalties) not effectively connected is taxed at a flat 30% of gross unless a treaty sets a lower rate; return: Form 1040-NR.
Text of the Convention (transcription with the 1959 proclamation and Senate reservation; gocodebook.com) — Signed at Washington 1 July 1957; ratifications exchanged at Karachi 21 May 1959; applies to U.S. taxable years beginning on or after 1 January 1959 (Art. XIX).

Case law

United States Tax Court, Topsnik v. Commissioner, 146 T.C. No. 1 (docket 2482-14), 20/01/2016 — Lawful permanent resident status continued until it was formally abandoned (Form I-407); the taxpayer could not rely on German residence under the treaty because he was not liable to tax in Germany on his worldwide income.

Updated 04/11/2026. The result is for information only and is not tax or legal advice. The FBR, other tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes with each Finance Act. Consult a qualified adviser before making decisions.

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