Ep 30: What Is English For "Green Card"?
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Yeah, it's not green anymore, but the name has persisted.
Do you know why the Permanent Residency Card is called the Green Card?
We answer this question and provide many more details about this "magic" document, which permits you to live and work permanently in the US if you are foreign-born.
We know quite a bit about it, having previously held this card.
We discuss the tax obligations and financial planning implications of being a green cardholder rather than a US citizen.
It's challenging to get, based on your home country, but once you get it, you must be careful if you want to abandon it to do it right.
Are you a green card holder? What questions do you have?
The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
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Jane Mepham, CFP (00:01.474)
with another shorty episode, which is where in 10 minutes or less, we take a concept or an idea or a terminology used in the cross border space and sort of just give it to you in common English. So in today's episode, we're going to talk about the green card, right? So to reside permanently in the U .S., you need one or two things. You need to be a U .S. citizen.
meaning you're probably born in the country or you need to be a green card holder. And so in today's episode, we're just going to talk a little bit about what this is, who can get it. And then we'll obviously touch on a few financial and tax implications of being a green card holder. Now, one thing I do want to say is the people or the number of people that can get the green card is limited.
based on these two types, family -based or employment -based, and each country gets a certain allocation, which is the reason why when we talk about work visas and people having to wait for so long to get the green card, it's because the number of people from your country that are eligible keeps going up. And
Manasa Nadig, EA (01:01.562)
Thank
Jane Mepham, CFP (01:25.388)
you could end up being in a very, very long queue because you're waiting for your number to become available. And
I'm sorry.
Manasa Nadig, EA (01:37.894)
Keep going. We can always edit this out.
Jane Mepham, CFP (01:38.946)
So, Manasa, do you want to define or tell us what a green card is or who a green card holder
Manasa Nadig, EA (01:49.39)
Yeah, actually, it green card is something that's common reference to what is a lawful permanent resident or an LPR. And this is a person who is a non -citizen of the US, but who has been granted authorization to live and work in the US on a permanent basis.
And as proof of that status, a person is given a permanent resident card, commonly known as a green card. And this is issued by the US Citizenship and Immigration Services, or another acronym, USCIS, which a lot of people who come into the country are very familiar with. But what's one thing that got Jane and me curious is why the color green?
you know. So I believe the green card was first really green maybe up until 1964 or so and then it went through some iterations of different colors and then it went back to being green in color from 2010 onward. So that's the reason why it's called a green card and obviously this is a very important
stage or milestone in a foreign -born national's life in the US and that's why it is important. So that's what it is Jane.
Jane Mepham, CFP (03:23.39)
So I like that definition and I actually have a bunch of old green cards in my closet, in my safe, whatever. I'm going to take a look after this. I never thought about it to actually see, yeah, which ones are green. But anyway, regardless of the color, and I'm just going to keep calling it the green card. You have certain rights as a permanent resident holdout. It's the green
Manasa Nadig, EA (03:34.68)
Yeah, good idea.
Jane Mepham, CFP (03:51.042)
One, obviously, and we're already talking about it is the green card allows you to stay or reside permanently in the US provided, of course, you do not commit any actions or any crimes that would make you deportable under immigration law. So this is something you really want to be thinking about. If you're a US citizen and you commit certain crimes, you
just be jailed and stay in the country. But as a green card holder, there's always the danger of being deported to your birth country. So you want to be careful about that, obviously. It also means you do not abandon your residency by moving to another country with the intention of living there permanently. So the thing Manasai and I are always talking about is its permanent resident, right? Which means
you are expected to live in the US permanently. But because we know life happens, if there's a reason why you need to be outside the US for an extended period of time, usually 12 months plus, actually I think maybe six to 12 months or something like that, you really wanna make sure you notify immigration and your immigration lawyer can work with you on this.
to get some forms that show the reason for your trip, how long you plan to be absent from the US, any other circumstances of your absence and events that may prolong your absence. So you wanna make sure you have all this because if you come back to the US after being overseas for more than 12 months and you don't have that form, they actually have the right to refuse you entry and you really, really.
don't want to have to deal with that. Of course, it also means you can work in the US and any legal job of your qualification and choosing. But some jobs are limited to US citizens, mainly for security reasons. So this is another difference between the green card and when you think about non -immigrant work visas. With those visas, you're limited to a very specific job and a very specific employer, and you kind of have to stay in that lane.
Jane Mepham, CFP (06:12.3)
But with a green card, you're allowed to work pretty much any job that you qualify for, except like I said, somewhere you do need some specific security clearance. And then of course, you're really protected by all laws of the US, you your state of residence or local jurisdiction. Obviously this means you are going to obey the laws. The one thing I do like to point out is you really can't vote.
And that's all I'm going to say when it comes to the voting part of it. So, Manasa, when I think about being a green card holder, what are the financial and tax mainly obligations of this?
Manasa Nadig, EA (06:55.298)
I know. Well, obviously, when you have certain rights, the rights come with responsibilities, always. So being a green card holder or a lawful permanent resident comes with responsibilities, which Jane already briefly touched upon this. You have to file your income tax returns. And when you file your income tax returns, you have to report
your US income and your worldwide income, as well as all of your worldwide financial assets to the Internal Revenue Service and file your FBARs and FATCA information and all that good stuff, as well as do this with the state where you live in, if that's one of the states where you have to file taxes.
This is applicable to you even if you are a green card holder who is living abroad. It's the same responsibilities of filing income tax returns and other compliance stuff. And basically, this is something that we kind of see from time to time that if you are a green card holder and you're living abroad,
There are certain treaty benefits, like a tax treaty benefits, which are available to you between the country of your residence and the United States. And you may be able to take advantage of some of these treaty benefits on your taxes. It does come with consequences. So please be careful when claiming benefits
a tax treaty. And of course, financially, you are treated as a US citizen for investing purposes in the US and also for declaring your worldwide income, again, regardless of where you live. Now that we talked about the rights and the responsibilities of being a green card holder, the next thing
Manasa Nadig, EA (09:17.348)
that people like to think about is does the green card or a permanent residency give you a path to the US citizenship? So yes, it does, provided you have taken necessary steps towards becoming a naturalized US citizen. And in order to take these steps, you have to meet certain eligibility criteria.
like continuous residence and physical presence of five years, and to be able to apply for naturalization. And another thing to remember on this path to US citizenship, and if you do become a US citizen, if the country of which you currently have a citizenship, does it allow you to be a dual citizen of both that country and the United States? And certain examples that quickly come to my mind are,
the UK and Australia, et cetera, where you could hold dual citizenships with both countries. So that was our shorty episode on Green Card or lawful permanent residence. So it is important for you to understand and, of course, fulfill all your legal obligations to maintain your status and take advantage of this path to full citizenship if that's what you desire.
And as always, thank you so much for listening and we encourage you to go to our website, theimcafe .com and subscribe so that you get notification of all our future episodes. Thanks for listening. Bye.