What does "exempt individual" mean?

An "exempt individual" is someone who is exempt from counting days of presence for the Substantial Presence Test. These individuals are

• students temporarily present in the U.S. under an F, J, M or Q visa and who substantially comply with the requirements of the visa are exempt individuals for no more than five calendar years and
• non students are exempt for no more than two years.

Note: This term has nothing to do with whether the individual will be exempt from having federal income tax or social security and Medicare taxes withheld - or filing a U.S. tax return.