Healthcare, Taxes, and a Mortgage, Oh My!

So your nonimmigrant visa was approved (congratulations!) and you have arrived in the US. Now what? In our experience, many foreign nationals have numerous practical questions as they settle into their new lives in the US—from what they need to sign a lease on an apartment to opening a bank account to getting a driver’s license and more. While we do not intend for this post to give any legal advice (or financial or tax advice, for that matter), we hope to provide general insights to some common questions.

What should I do first?
After entering the US, foreign nationals should print the online version of their I-94 information as soon as possible and make sure that their name, the classification they were admitted in, and all other information is correct. Foreign nationals should also save the printed I-94 in a safe place. The I-94 is important because it specifies the exact amount of time a foreign national is allowed to stay in the US and may differ from the visa stamp. The I-94 is also necessary to gain certain benefits, such as getting a US Social Security number. Foreign nationals should print, check, and save their I-94 information after each time they enter the US.

I have a US Social Security number now, right?
Usually, no. One of the most common confusions we see is when foreign nationals assume they are automatically assigned a Social Security number when their nonimmigrant visa is approved. In order to receive a Social Security number, foreign nationals—after arriving in the US—must follow the Social Security Administration’s instructions to complete a Form SS-5, Social Security Card Application, and present it in-person at their nearest Social Security office. There is no fee to apply for a Social Security number and card.

The Social Security Administration recommends waiting for ten days after arriving in the US to apply for a Social Security number as this makes it easier for them to verify foreign nationals’ immigration documents, which speeds up the processing and issuance of the number. When applying for the Social Security card, foreign nationals must produce two separate original documents proving their identity, immigration status, work eligibility, and age. Evidence may include their original birth certificate, unexpired passport or driver’s license, as well as a copy of the I-797 visa approval notice, and the I-94 printout.

Once foreign nationals receive their Social Security number, it is assigned to them for life. Under most circumstances, foreign nationals will not need to re-apply or receive a new number in the future, even if they change visa status. It is important to note, however, that not all visa statuses allow for work authorization, even if foreign nationals have a Social Security number.  

Can I open a US bank account?
Yes, usually. While every bank has its own internal procedures and requirements unrelated to immigration law, being a nonimmigrant visa holder does not prohibit foreign nationals from opening a bank account. After speaking with representatives from several banks here are a few tips for foreign nationals to keep in mind when opening a US bank account:

• Most banks require foreign nationals to apply for a bank account in-person;
• Foreign nationals are not always required to have a US Social Security number in order to open a bank account;
• Generally banks require a foreign nationals’ unexpired passport to open a bank account. Most banks also require a second form of identification, and the types of accepted documentation vary but include: a valid US or international driver’s license with photo, US nonimmigrant visa, or US government-issued ID; less commonly accepted forms of identification include a foreign bank statement; major credit card; or current utility bill;
• Foreign nationals will likely need a proof of address dated within sixty days of the application for a bank account. If foreign nationals are deemed “residents” for US tax purposes (see below for that discussion), they will likely need to provide a US address; if foreign nationals are deemed “nonresidents” for US tax purposes (again, see below), they may be allowed to provide a foreign address. The address may be proved via a utility bill or phone bill, for example.   

Please note that it is always at the bank’s discretion whether to open an account for a particular individual at their institution. If one bank is not able to open an account, foreign nationals should try a different institution. 

Am I required to file a US tax return?
It depends. There are many variables which determine when foreign nationals are required to file a US tax return and, if so, how they should file. For this reason, foreign nationals should consult a US or international accountant or tax attorney for professional advice. As a basic tool, Interactive Tax Assistant from the Internal Revenue Service (IRS) provides foreign nationals generic guidance to determine if they are required to file a US tax return. Generally, if foreign nationals are engaged in business or trade in the US, they will be required to file a US tax return. 

If foreign nationals are required to file a US tax return, a common source of confusion is their tax status—whether they should file as a “resident"; or “nonresident.” It is very important to understand that the definition of the word “resident” for immigration purposes is different than the definition of the word “resident” for tax purposes. When immigration attorneys refer to a permanent “resident” in the immigration context, we are referring to a foreign national who has a Green Card. When accountants refer to a “resident” in the tax context, they are referring to foreign nationals who, whether they are Green Card holders or not, pass the “substantial presence test,” which focuses on how many days foreign nationals spent physically inside the US during that tax year. In some instances, nonimmigrant visa holders who spend a large portion of the year physically inside the US will be required to file their US tax return as a “resident.”

The IRS has some excellent articles and tips to help foreign nationals determine their tax status; but, again, it is advisable for foreign nationals to consult a US or international accountant or tax attorney for professional advice about filing a US tax return.

Can I rent an apartment? What about securing a mortgage to purchase a home?
As to renting, usually yes. While landlords each have their own requirements for renters, generally at a minimum, foreign nationals will need their unexpired passport, visa, second form of identification, Social Security number, and employment letter or student verification to complete a rental application. After speaking to several brokers, the most common obstacle for foreign nationals is the credit check that a landlord will run on each rental applicant. If foreign nationals do not have a US credit history, it will be hard to determine if they are a good credit risk, making them less desirable tenants. One broker suggested a workaround for this obstacle: landlords may be able to either accept a US-based guarantor or a higher security deposit.

As to foreign nationals obtaining a mortgage, it depends. As with opening a bank account, every bank has its own internal procedures and requirements unrelated to immigration law, but does not simply exclude nonimmigrant visa holders. After speaking with representatives from several banks, here are some tips when applying for a mortgage:

• Foreign nationals must have a US Social Security number;
• All banks as far as we’ve seen require foreign nationals’ unexpired passports and visas;

According to some banks’ internal policies, not all nonimmigrant visa categories may apply for a mortgage. Only foreign nationals holding certain nonimmigrant visa categories (including Os, Hs, and Ls, among others) may apply. Based on banks’ concerns about risk, foreign nationals holding F-1 student visas, B-1/B-2 visitor visas, or who are in the US under the Visa Waiver Program will likely not be considered eligible for mortgages.

• All applicants must provide evidence of a US residence and US employment for two full years prior to the mortgage application;
• The applicants must also have paid US taxes for the past two years.

Again, please note that it is always at the bank’s discretion whether to approve a mortgage for a particular individual at their institution.

Do I need a US driver's license in order to drive in the US?
As with many of these questions, it depends. Each state has its own motor vehicle laws, so foreign nationals should check the driving rules in the state(s) they will be residing or visiting to verify that they can use their non-US driver’s license. Most states will allow foreign nationals from a wide variety of countries to drive using their unexpired foreign driver’s license, so long as they meet certain qualifications (i.e. age restrictions and only for a certain period of time, etc.). While not required, foreign nationals should obtain an International Driving Permit (IDP) from their home country. The IDP translates the information contained on the official driver’s license into ten languages, including English.

It is important to note that each state has different residency requirements for obtaining a US driver’s license. For example, in New York, only New York State residents need to apply for a New York state driver’s license; however, after becoming a New York State resident, the license must be obtained within thirty days. The New York Department of Motor Vehicles (DMV) has helpful information about required documentation for foreign nationals applying for a driver’s license.  

Am I eligible for health insurance in the US? Am I required to register for Obamacare?
As to the first question: yes, usually. Many US employers offer health insurance for their employees, so this is maybe one way to obtain it. Another way to obtain health insurance in the US may be through the Patient Protection and Affordable Care Act (PPACA), more commonly known as Obamacare.

As to whether Obamacare is required for foreign nationals, it depends. Foreign nationals who live in the US but are only physically present for such a short period of time that they are not considered a “resident” for US tax purposes are not required to enroll in US health insurance even though they may still be required to file a US tax return.

Conversely, foreign nationals who are physically in the US long enough in a year to qualify as a “resident” for US tax purposes (according to discussion above) are required to enroll in US health insurance. Unfortunately, having health insurance in their home countries does not normally exempt foreign nationals from this requirement. Upon entering the US in lawful status, foreign nationals generally have a period of sixty days to enroll in health insurance. Foreign nationals should contact their state marketplace representative as soon as possible after arriving in the US to ensure all deadlines are met.

Under Obamacare regulations, those who are required to but fail to enroll within sixty days will usually be charged a fee for every month they don’t have insurance on their year-end federal modified adjusted gross income.

While there is not always a black and white answer to the questions that may arise while settling into the US, we hope this post can provide a helpful starting point.

And also: welcome and enjoy your stay!