What's the Difference Between a US Citizen and a US Resident?

One other distinction that helped me was understanding resident alien vs citizen.

A resident alien is still not a U.S. citizen.

A U.S. citizen generally has citizenship rights and obligations that a resident alien doesn't have, including the ability to hold a U.S. passport and vote in federal elections, subject to the applicable rules.

A Green Card holder is a lawful permanent resident, but that status isn't the same as citizenship.

For tax purposes, a resident alien is generally taxed under the U.S. federal income-tax rules applicable to residents, although there are specific rules and exceptions.

If you're an Indian citizen living in the U.S. and still have Indian assets, I would keep your U.S. immigration status, U.S. tax residency and Indian tax residency as three separate concepts when preparing your paperwork.

I'm on an H-1B and had the same confusion.

I originally thought that because I wasn't a citizen or Green Card holder, I had to be a nonresident for U.S. tax purposes.

That's not necessarily true.

The IRS uses rules such as the Substantial Presence Test to determine whether someone is a resident alien for federal income-tax purposes. There are also exceptions and special rules for certain visa categories and circumstances.

So you can have something like:

Indian citizen + H-1B visa + U.S. tax resident

Those aren't contradictory.

Your immigration status and tax status are separate questions.

For Indian tax purposes, though, you also need to determine your residential status under Indian tax law. That can affect how India taxes your Indian and foreign income.

So I wouldn't use the term "U.S. resident" interchangeably across immigration and tax forms.

The confusing part is that "resident" can mean different things depending on the context.

I'm a Green Card holder, so from an immigration perspective I'm a lawful permanent resident. For U.S. federal income-tax purposes, I'm generally treated as a resident alien because of my Green Card status.

But you don't necessarily need a Green Card to become a U.S. tax resident.

For example, certain people on temporary visas can meet the Substantial Presence Test and become U.S. resident aliens for federal tax purposes.

That doesn't make them U.S. citizens.

Citizenship is about your legal nationality/status. Tax residency is about how the tax rules classify you for a particular tax year.

I had to learn this the hard way when dealing with Indian investments. Being a U.S. tax resident didn't mean that I had automatically become a U.S. citizen or that my Indian citizenship had changed.

I'd always check what a particular form means by "resident" before answering it.

Here are some of the key factors that you will get from getting a US citizenship. 

• US citizens have the right to vote. 
• They can participate in the democratic process in the country.   
• Citizens can hold government positions and help in shaping the bright future of the country by making new policies.
• Can sponsor their family members to help in get US citizenship easily. 
• They need to follow all the rules and regulations in the country. 

A US permanent resident means foreign nationals can live, work, or study in the US for a long period of time. However, US permanent residents have some limitations on living in the host country. It is also known by the name of the Green card in the US.