Scenario: a Hanoi software engineer is assigned to California for 8 months, paid from Vietnam but working full-time in the US. He wonders: must he pay US tax, which taxes, and is the income double-taxed? The answer starts with the substantial presence test — and differs completely between “pass” and “fail”.
1. The substantial presence test: 31 days and 183 days
The IRS determines tax residence through the substantial presence test, with two cumulative conditions: (i) physical presence in the US for at least 31 days in the current tax year, and (ii) 183 days on a weighted formula: days this year + 1/3 of days last year + 1/6 of days the year before. Pass both → resident alien: taxed like a US citizen, i.e. on worldwide income (including Vietnamese income). Fail → nonresident alien: taxed only on US-source income. Example: 8 months (~240 days) in the US in one year — far above 183 → resident alien for that year, despite remaining a Vietnamese citizen with Vietnamese tax duties.
2. Three US tax layers: federal, social security, state
Layer 1 — federal income tax: progressive brackets (IRS tables published annually, inflation-adjusted). Layer 2 — FICA social security tax: employees pay 6.2% Social Security + 1.45% Medicare on wages; employers match — a surprise for many Vietnamese experts, as Vietnam has no directly comparable payroll levy outside social insurance. Layer 3 — state tax: varies by state — California levies steep progressive income tax, while Texas and Florida levy no state income tax at all. The work state (where there is a choice) materially affects net income.
3. Coordinating with Vietnamese duties: double-tax risk
Vietnamese experts on short US assignments usually remain Vietnamese tax residents (regular home/183-day presence in Vietnam in the tax year) and must declare worldwide income in Vietnam. If simultaneously a US resident alien, the income is taxed in both countries. Mitigation tools are double taxation agreements (credit for tax paid abroad) and domestic foreign-tax credits. An important honesty note: the Vietnam–US tax treaty was signed in 2008 — its in-force status must be verified before relying on any treaty benefit; do not assume it is effective when modelling.
4. Exceptions and traps: exempt days, visa type
Not every presence day counts: days as an exempt individual (F/J students and scholars, athletes…) are excluded for the first several years. Conversely, the common trap: experts on L-1/H-1B visas working full-time — every day counts, easily breaching 183 in year one. Another trap: the transition year — the arrival year may be a dual-status year, with far more complex filing than a pure resident or nonresident year.
5. Pre-assignment checklist
One, estimate weighted presence days over three years to know your category. Two, identify the work state and its tax rates. Three, clarify with the company: who bears the tax (any tax-equalisation policy), where salary is paid, whether US filing support exists. Four, verify the Vietnam–US treaty status before planning. Five, hire a US tax preparer for year one — dual-status or first resident-alien years are easy to get wrong. Six, keep all travel evidence (tickets, entry stamps) as proof for the presence test.
Frequently Asked Questions
Do 8 months in the US make me a US tax resident?
Very likely. Eight months (~240 days) far exceeds the 183-day weighted threshold of the substantial presence test (with 31 days in the current year) → resident alien, taxable on worldwide income like a US citizen for that year.
How do resident and nonresident aliens differ for tax?
Resident alien: taxed on worldwide income (including non-US income) like a US citizen. Nonresident alien: taxed only on US-source income (US work wages, US property income…). The substantial presence test draws the line.
Besides federal tax, what else is payable in the US?
Two more layers: FICA social security tax (employee 6.2% Social Security + 1.45% Medicare) and state income tax (varies — California yes, Texas/Florida no). The real total burden is far above the federal tax alone.
Is the Vietnam–US tax treaty in force?
The treaty was signed in 2008. Its in-force status must be checked at the time of application — this article makes no claim. If in force, it allows credit for tax paid in the other state; if not, double-tax relief depends on each country’s domestic law.
This article has been quality-reviewed by the FLAW AI Legal Council
