What Is IRS Form 1078 and What Replaced It?
Understand the current IRS requirements for certifying U.S. tax residency, a process once handled by the now-obsolete Form 1078.
IRS Form 1078, the Certificate of Alien Claiming Residence in the United States, is an obsolete tax document no longer used by the IRS or individuals. Historically, its purpose was for a non-resident alien to declare to a withholding agent, such as an employer, that they had become a U.S. resident for tax purposes. This certification would affect how income tax was withheld from their pay. The form was officially replaced in 1998, and individuals now use a different process to certify their U.S. tax residency status, which is determined by specific IRS definitions.
Determining U.S. Residency for Tax Purposes
An individual’s U.S. tax residency status is determined by specific criteria established by the IRS, not by their immigration status alone. The two primary standards are the Green Card Test and the Substantial Presence Test. Meeting either of these tests classifies an individual as a U.S. resident for tax purposes, which means they are generally taxed in the same manner as a U.S. citizen and must report worldwide income.
The Green Card Test is straightforward: if an individual is a lawful permanent resident of the United States at any time during the calendar year, they are considered a U.S. resident for tax purposes. This status is granted by U.S. Citizenship and Immigration Services (USCIS). An individual generally remains a tax resident under this test until their green card status is either formally revoked or judicially determined to be abandoned.
The Substantial Presence Test is a calculation based on the number of days an individual is physically present in the United States over a three-year period. To meet this test, one must be physically present in the U.S. for at least 31 days during the current year and a total of 183 days during the three-year period that includes the current year and the two years immediately before. The 183-day total is calculated by counting all days of presence in the current year, one-third of the days in the first preceding year, and one-sixth of the days in the second preceding year.
The Modern Equivalent Form W-9
The modern form that serves a similar function to Form 1078 is Form W-9, Request for Taxpayer Identification Number and Certification. When a foreign individual becomes a U.S. resident for tax purposes, payers of income, such as employers or financial institutions, will ask them to complete a Form W-9. The form’s primary purpose is to provide a correct Taxpayer Identification Number (TIN) to the entity that will pay them income.
Completing Form W-9 requires specific personal information. The individual must provide their full name as it appears on their tax return, their mailing address, and their TIN. For most individuals, the TIN is their Social Security Number (SSN). The form also requires the individual to certify that they are a U.S. person, which includes a resident alien, and that the TIN provided is correct.
This certification is used by the payer to prepare and file information returns with the IRS, such as Form 1099-NEC for nonemployee compensation. Failure to provide a correct TIN can result in backup withholding, where the payer is required to withhold tax from payments at a flat rate of 24%.
How to Submit Form W-9
The submission process for a completed Form W-9 is direct and does not involve the IRS. The form should never be sent to the IRS. Instead, the individual who completes and signs the form must provide it directly to the person or company that requested it. This entity is often referred to as the requester or withholding agent.
The requester is responsible for keeping the completed Form W-9 in their records and uses the certified information to accurately report payments to the IRS. The individual providing the form should retain a copy for their own records.