Instructions for IRS Form 1040-C "U.S. Departing Alien Income Tax Return"

This document contains official instructions for IRS Form 1040-C, U.S. Departing Alien Income Tax Return - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 1040-C is available for download through this link.

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Download Instructions for IRS Form 1040-C "U.S. Departing Alien Income Tax Return"

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2019
Department of the Treasury
Internal Revenue Service
Instructions for Form 1040-C
U.S. Departing Alien Income Tax Return
General Instructions
Section references are to the Internal
Social security number (SSN) re-
Revenue Code unless otherwise noted.
quired for child tax credit. Your
child must have an SSN issued before
Future developments. For the latest
Reminders
the due date of your 2019 return
information about developments
Use your 2018 tax return as a guide in
(including extensions) to be claimed
related to Form 1040-C and its
figuring your 2019 tax, but be sure to
as a qualifying child for the child tax
instructions, such as legislation
consider the following.
credit or additional child tax credit. If
enacted after they were published, go
your dependent child has an ITIN, but
Former U.S. citizens and former
to
IRS.gov/Form1040c.
U.S. long-term residents. If you
not an SSN, issued before the due
What's New
date of your 2019 return (including
expatriate or terminate your long-term
residency in 2019, you must file Form
extensions), you may be able to claim
Affordable Care Act individual
the new credit for other dependents
8854, Initial and Annual Expatriation
mandate responsibility. Effective
Statement, with your 2019 income tax
for that child.
for months beginning after December
return. You also may be subject to
31, 2018, the Tax Cut and Jobs Act
Purpose of Form
income tax under section 877A on the
eliminates the shared responsibility
net unrealized gain on your property
Form 1040-C is used by aliens who
payment for individuals. No penalty is
as if the property had been sold on the
intend to leave the United States or
due if an individual or family does not
day before your expatriation date. You
any of its possessions to:
obtain health care coverage in 2019
figure this tax on Form 8854. For more
Report income received or
and thereafter.
details, see Pub. 519, U.S. Tax Guide
expected to be received for the entire
for Aliens.
Standard deduction. If you do not
tax year, and
itemize your deductions, you may be
Pay the expected tax liability on that
Social security or Medicare taxes
able to take the standard deduction.
income, if they are required to do so.
withheld in error. If you are a
The basic standard deduction has
foreign student on an F-1, J-1, M, or Q
Form 1040-C must be filed before
increased for 2019. See
Standard
visa, and social security or Medicare
an alien leaves the United States or
Deduction (Group I
only), later.
taxes were withheld on your wages in
any of its possessions. For more
error, you may want to file Form 843,
Your standard deduction is
information, see
How To Get the
Claim for Refund or Request for
zero if (a) your spouse
Certificate, later.
!
Abatement, to request a refund of
itemizes on a separate return,
If you are a nonresident alien,
CAUTION
these taxes. For more information,
or (b) you were a dual-status alien and
use the 2018 Instructions for
TIP
see Refund of Taxes Withheld in Error
you do not elect to be taxed as a
Form 1040NR, U.S.
in chapter 8 of Pub. 519.
resident alien for 2019.
Nonresident Alien Income Tax Return,
Child tax credit not refundable for
to help you complete Form 1040-C.
Alternative minimum tax (AMT) ex-
resident aliens electing to exclude
emption amount increased. The
foreign earned income from tax.
If you are a resident alien, use
AMT exemption amount is increased
Group I (resident alien) filers who
the 2018 Instructions for Form
TIP
to $71,700 ($111,700 if married filing
exclude foreign earned income from
1040, U.S. Individual Income
jointly or qualifying widow(er);
their gross income may not claim any
Tax Return, to help you complete
$55,850 if married filing separately).
additional child tax credit on line 28.
Form 1040-C.
The income level at which the AMT
These filers are only allowed to claim
exemption begins to phase out has
You can get tax forms, instructions,
the child tax credit to the extent
increased to $510,300 ($1,020,600 if
and publications from the Internal
allowable on line 19.
married filing jointly).
Revenue Service (IRS). See
Individual taxpayer identification
Additional
information, later.
Social security tax. For 2019, the
number (ITIN) renewal. ITINs
maximum amount of earned income
Alien status rules. If you are not a
assigned before January 1, 2013, and
(wages and net earnings from
citizen of the United States, specific
ITINs that you have not included on at
self-employment) subject to the social
rules apply to determine if you are a
least one tax return filed in the last
security tax is $132,900.
resident or nonresident alien for tax
three consecutive years will expire.
purposes. Intent is not a factor in
Renew your ITIN to avoid delays in
determining your residency status.
processing your tax return. For more
information, see the Instructions for
You are considered a resident alien
Form W-7.
if you meet either the green card test
or the substantial presence test.
However, even though you otherwise
Nov 27, 2018
Cat. No. 11311Q
2019
Department of the Treasury
Internal Revenue Service
Instructions for Form 1040-C
U.S. Departing Alien Income Tax Return
General Instructions
Section references are to the Internal
Social security number (SSN) re-
Revenue Code unless otherwise noted.
quired for child tax credit. Your
child must have an SSN issued before
Future developments. For the latest
Reminders
the due date of your 2019 return
information about developments
Use your 2018 tax return as a guide in
(including extensions) to be claimed
related to Form 1040-C and its
figuring your 2019 tax, but be sure to
as a qualifying child for the child tax
instructions, such as legislation
consider the following.
credit or additional child tax credit. If
enacted after they were published, go
your dependent child has an ITIN, but
Former U.S. citizens and former
to
IRS.gov/Form1040c.
U.S. long-term residents. If you
not an SSN, issued before the due
What's New
date of your 2019 return (including
expatriate or terminate your long-term
residency in 2019, you must file Form
extensions), you may be able to claim
Affordable Care Act individual
the new credit for other dependents
8854, Initial and Annual Expatriation
mandate responsibility. Effective
Statement, with your 2019 income tax
for that child.
for months beginning after December
return. You also may be subject to
31, 2018, the Tax Cut and Jobs Act
Purpose of Form
income tax under section 877A on the
eliminates the shared responsibility
net unrealized gain on your property
Form 1040-C is used by aliens who
payment for individuals. No penalty is
as if the property had been sold on the
intend to leave the United States or
due if an individual or family does not
day before your expatriation date. You
any of its possessions to:
obtain health care coverage in 2019
figure this tax on Form 8854. For more
Report income received or
and thereafter.
details, see Pub. 519, U.S. Tax Guide
expected to be received for the entire
for Aliens.
Standard deduction. If you do not
tax year, and
itemize your deductions, you may be
Pay the expected tax liability on that
Social security or Medicare taxes
able to take the standard deduction.
income, if they are required to do so.
withheld in error. If you are a
The basic standard deduction has
foreign student on an F-1, J-1, M, or Q
Form 1040-C must be filed before
increased for 2019. See
Standard
visa, and social security or Medicare
an alien leaves the United States or
Deduction (Group I
only), later.
taxes were withheld on your wages in
any of its possessions. For more
error, you may want to file Form 843,
Your standard deduction is
information, see
How To Get the
Claim for Refund or Request for
zero if (a) your spouse
Certificate, later.
!
Abatement, to request a refund of
itemizes on a separate return,
If you are a nonresident alien,
CAUTION
these taxes. For more information,
or (b) you were a dual-status alien and
use the 2018 Instructions for
TIP
see Refund of Taxes Withheld in Error
you do not elect to be taxed as a
Form 1040NR, U.S.
in chapter 8 of Pub. 519.
resident alien for 2019.
Nonresident Alien Income Tax Return,
Child tax credit not refundable for
to help you complete Form 1040-C.
Alternative minimum tax (AMT) ex-
resident aliens electing to exclude
emption amount increased. The
foreign earned income from tax.
If you are a resident alien, use
AMT exemption amount is increased
Group I (resident alien) filers who
the 2018 Instructions for Form
TIP
to $71,700 ($111,700 if married filing
exclude foreign earned income from
1040, U.S. Individual Income
jointly or qualifying widow(er);
their gross income may not claim any
Tax Return, to help you complete
$55,850 if married filing separately).
additional child tax credit on line 28.
Form 1040-C.
The income level at which the AMT
These filers are only allowed to claim
exemption begins to phase out has
You can get tax forms, instructions,
the child tax credit to the extent
increased to $510,300 ($1,020,600 if
and publications from the Internal
allowable on line 19.
married filing jointly).
Revenue Service (IRS). See
Individual taxpayer identification
Additional
information, later.
Social security tax. For 2019, the
number (ITIN) renewal. ITINs
maximum amount of earned income
Alien status rules. If you are not a
assigned before January 1, 2013, and
(wages and net earnings from
citizen of the United States, specific
ITINs that you have not included on at
self-employment) subject to the social
rules apply to determine if you are a
least one tax return filed in the last
security tax is $132,900.
resident or nonresident alien for tax
three consecutive years will expire.
purposes. Intent is not a factor in
Renew your ITIN to avoid delays in
determining your residency status.
processing your tax return. For more
information, see the Instructions for
You are considered a resident alien
Form W-7.
if you meet either the green card test
or the substantial presence test.
However, even though you otherwise
Nov 27, 2018
Cat. No. 11311Q
would meet the substantial presence
TaxpayerAdvocate.IRS.gov/
to help
Note. There are some tax items that
test, you will not be considered a U.S.
you understand what these rights
are not addressed on Form 1040-C or
resident if you qualify for the closer
mean to you and how they apply.
in these instructions that must be
connection to a foreign country
These are your rights. Know them.
taken into account on your final return.
exception or you are able to qualify as
Use them.
For example, if you are a Group I
a nonresident alien by reason of a tax
(resident alien) filer, you must
What can TAS do for you? TAS can
treaty. These tests and the exception
reconcile any advance payments of
help you resolve problems that you
are discussed in the instructions for
the premium tax credit with the
can’t resolve with the IRS. And their
Part I—Explanation of
premium tax credit allowed on your
service is free. If you qualify for their
Status—Resident or Nonresident
tax return.
assistance, you will be assigned to
Alien, later.
one advocate who will work with you
Certificate of Compliance
Additional information. For more
throughout the process and will do
Note. The issuance of a certificate of
information on the taxation of resident
everything possible to resolve your
compliance is not a final
and nonresident aliens, residency
issue. TAS can help you if:
determination of your tax liability. If it
tests, and other special rules, see
Your problem is causing financial
is later determined that you owe more
Pub. 519.
difficulty for you, your family, or your
tax, you will have to pay the additional
business;
You can download tax forms,
tax due.
You face (or your business is
instructions, and publications
facing) an immediate threat of
Form 1040-C or Form 2063. If you
at IRS.gov/Forms-Pubs.
adverse action; or
are an alien, you should not leave the
You’ve tried repeatedly to contact
United States or any of its
Ordering forms and
the IRS but no one has responded, or
possessions without getting a
publications. Go to
IRS.gov/
the IRS hasn’t responded by the date
certificate of compliance from your
OrderForms
to order current
promised.
IRS Field Assistance Area Director on
and prior-year forms and instructions.
Form 1040-C or Form 2063, U.S.
Your order should arrive within 10
How can you reach TAS? TAS has
Departing Alien Income Tax
business days.
offices in every state, the District of
Statement, unless you meet one of
Columbia, and Puerto Rico. Your local
the Exceptions, explained later.
People who are deaf,
advocate’s number is in your local
hard-of-hearing, or have a
You can file the shorter Form 2063
directory and at
speech disability and who
if you have filed all U.S. income tax
TaxpayerAdvocate.IRS.gov/Contact-
have access to TTY/TDD equipment
returns you were required to file, you
Us. You can also call them at
can call 800-829-4059. Deaf or
paid any tax due, and either of the
877-777-4778.
hard-of-hearing individuals can also
following applies.
How else does TAS help taxpay-
contact the IRS through relay services
You have no taxable income for the
ers? TAS works to resolve
such as the Federal Relay Service
year of departure and for the
large-scale problems that affect many
available at www.gsa.gov/FedRelay.
preceding year (if the time for filing the
taxpayers. If you know of one of these
earlier year's return has not passed).
broad issues, please report it to them
To get information, forms, and
You are a resident alien with
at IRS.gov/SAMS.
publications in Spanish, go to
taxable income for the preceding year
TIP
IRS.gov/Espanol.
or for the year of departure, but the
Final Return Required
Area Director has decided that your
Tax questions. If you have a
A Form 1040-C is not a final return.
leaving will not hinder collecting the
tax question not answered by
You must file a final income tax return
tax.
TIP
this publication, go to
after your tax year ends.
Exceptions. You do not need a
IRS.gov/Individuals/International-
If you are a U.S. citizen or resident
certificate of compliance if any of the
Taxpayers.
alien on the last day of the year, you
following applies.
should file Form 1040 reporting your
The Taxpayer Advocate Service
1. You are a representative of a
worldwide income. If you are not a
(TAS) Is Here To Help You
foreign government who holds a
U.S. citizen or resident alien on the
diplomatic passport, a member of the
What is TAS? TAS is an
last day of the year, you should file
representative's household, a servant
independent organization within the
Form 1040NR. However, certain
who accompanies the representative,
IRS that helps taxpayers and protects
individuals who were resident aliens
an employee of an international
taxpayer rights. Their job is to ensure
at the beginning of the tax year but
organization or foreign government
that every taxpayer is treated fairly
nonresident aliens at the end of the
whose pay for official services is
and that you know and understand
tax year must file a “dual-status”
exempt from U.S. taxes and who has
your rights under the
Taxpayer Bill of
return. See
Dual-status tax
year, later.
no other U.S. source income, or a
Rights.
member of the employee's household
Any tax you pay with Form 1040-C
who has no income from U.S.
How can you learn about your tax-
counts as a credit against tax on your
sources. However, if you signed a
payer rights? The Taxpayer Bill of
final return. Any overpayment shown
waiver of nonimmigrant's privileges as
Rights describes 10 basic rights that
on Form 1040-C will be refunded only
a condition of holding both your job
all taxpayers have when dealing with
if and to the extent your final return for
and your status as an immigrant, this
the IRS. Go to
the tax year shows an overpayment.
-2-
Form 1040-C 2019
exception does not apply, and you
for business and do not stay in the
3. Receipts for income taxes paid
must get a certificate.
United States or any of its
on these returns.
possessions for more than 90 days
2. You are a student, industrial
4. Receipts, bank records,
during the tax year.
trainee, or exchange visitor, or the
canceled checks, and other
spouse or child of such an individual.
f. You are a resident of Canada or
documents that prove your
To qualify for this exception, you must
Mexico who commutes frequently to
deductions, business expenses, and
have an F-1, F-2, H-3, H-4, J-1, J-2, or
the United States to work and your
dependents claimed on the returns.
Q visa. Additionally, you must not
wages are subject to income tax
5. A statement from each
have received any income from
withholding.
employer you worked for this year
sources in the United States other
g. You are a military trainee
showing wages paid and tax withheld.
than:
admitted for instruction under the
If you are self-employed, you must
a. Allowances covering expenses
Department of Defense and you will
bring a statement of income and
incident to your study or training in the
leave the United States on official
expenses up to the date you plan to
United States (including expenses for
military travel orders.
leave.
travel, maintenance, and tuition);
6. Proof of any payments of
However, exception 4 does not
b. The value of any services or
estimated tax for the past year and the
apply if the Area Director believes you
accommodations furnished incident to
current year.
had taxable income during the current
such study or training;
tax year through your departure date
7. Documents showing any gain or
c. Income from employment
or the preceding tax year and your
loss from the sale of personal and/or
authorized under U.S. immigration
leaving the United States would
real property, including capital assets
laws; or
hinder collecting the tax.
and merchandise.
d. Interest on deposits, but only if
8. Documents concerning
How To Get the Certificate
that interest is not effectively
scholarship or fellowship grants, such
To get a certificate of compliance, you
connected with a U.S. trade or
as: (a) verification of the grantor,
must go to an IRS office at least two
business.
source, and purpose of the grant; (b)
weeks before you leave the United
copies of the application for, and
3. You are a student, or the
States and file either Form 2063 or
approval of, the grant; (c) a statement
spouse or child of a student, with an
Form 1040-C and any other required
of the amount paid, and your duties
M-1 or M-2 visa. To qualify, you must
tax returns that have not been filed.
and obligations under the grant; and
not have received any income from
The certificate may not be issued
(d) a list of any previous grants.
sources in the United States other
more than 30 days before you leave. If
than:
9. Documents indicating
both you and your spouse are aliens
qualification for special tax treaty
a. Income from employment
and both of you are leaving the United
benefits.
authorized under U.S. immigration
States, both of you must go to the IRS
laws, or
10. Document verifying your date of
office.
departure from the United States,
b. Interest on deposits, but only if
To find an IRS office, click on
such as an airline ticket.
that interest is not effectively
Contact Your Local IRS Office
and
connected with a U.S. trade or
11. Document verifying your U.S.
enter your zip code to find the nearest
business.
taxpayer identification number (TIN),
office. Please note that all Taxpayer
such as a social security card or an
4. Any of the following applies.
Assistance Centers (TACs) operate
IRS-issued Notice CP 565 showing
by appointment. Services are limited
a. You are on a pleasure trip and
your individual taxpayer identification
and not all services are available at
have a B-2 visa.
number (ITIN).
every TAC office. Call 844-545-5640
b. You are on a business trip, have
to schedule an appointment.
a B-1 visa or a combined B-1/B-2
Note. If you are married and reside in
visa, and do not stay in the United
Remember that you must visit an
a community property state, also bring
States or any of its possessions for
IRS office at least two weeks (but no
the documents listed on this page for
more than 90 days during the tax
more than 30 days) before you leave
your spouse. This applies whether or
year.
the United States, so make sure you
not your spouse requires a certificate.
call for an appointment well before
c. You are passing through the
If you are filing Form 1040-C, file an
those time frames.
United States or any of its
original and one copy for the tax year
possessions, including travel on a C-1
Please be prepared to furnish your
in which you plan to leave. If you are
visa or under a contract, such as a
anticipated date of departure and
departing between January 1, 2019,
bond agreement, between a
bring the following records with you if
and April 15, 2019, you also must file
transportation line and the U.S.
they apply.
Form 1040NR or Form 1040 for 2018
Attorney General.
and pay any tax due.
1. A valid passport with your alien
d. You are admitted on a
registration card or visa.
Generally, a certificate of
border-crossing identification card.
2. Copies of your U.S. income tax
compliance on Form 1040-C will be
e. You do not need to carry
returns filed for the past 2 years. If you
issued without your paying tax or
passports, visas, or border-crossing
were in the United States for less than
posting bond if you have not received
identification cards because you are
2 years, bring copies of the income
a termination assessment. A
(i) visiting for pleasure or (ii) visiting
tax returns you filed for that period.
termination assessment is a
Form 1040-C 2019
-3-
demand for immediate payment of
You also can visit the SSA's
Substantial presence test. You are
income tax for the current and
website at
www.ssa.gov/
considered a resident alien for tax
immediately preceding year.
ssnumber/, and then enter
purposes if you meet the substantial
“Noncitizen” in the search box.
presence test for 2019. You meet this
This certificate applies to all of your
test if you were physically present in
departures during the current tax year,
Individual taxpayer
the United States for at least:
subject to revocation on any later
identification number (ITIN). If you
31 days during 2019, and
departure if the Area Director believes
do not have an SSN and are not
183 days during the period 2019,
your leaving would hinder collecting
eligible to get one, you must apply for
2018, and 2017, using the following
the tax.
an ITIN. For details on how to apply
chart.
If you owe income tax and the Area
for an ITIN, see Form W-7,
Director determines that your
Application for IRS Individual
(a)
(b)
(c)
(d)
departure will jeopardize the
Taxpayer Identification Number, and
Year
Days of
Multiplier
Testing
collection of the tax, a certificate of
its instructions. Get the form and its
physical
days
instructions at
IRS.gov/forms-pubs/
compliance on Form 1040-C will be
presence
(multiply
issued only when you pay the tax due
about-form-w-7. If you already have
(b) times
or post bond, and the certificate will
an ITIN, enter it wherever your SSN is
(c))
apply only to the departure for which it
requested on your tax return.
2019
1.000
is issued.
If you are required to include
2018
.333
another person's SSN on your return
For additional information go to
2017
.167
and that person does not have and
IRS.gov/Individuals/International-
cannot get an SSN, enter that
Total testing days (add
Taxpayers/Departing-Alien-
column (d))
person's ITIN.
Clearance-Sailing-Permit.
Note. An ITIN is for tax use only. It
Specific Instructions
does not entitle you to social security
benefits or change your employment
Days of presence in the United
Joint return. Nonresident aliens
or immigration status under U.S. law.
States. Generally, you are treated as
cannot file a joint return. Resident
For more information go to
IRS.gov/
present in the United States on any
aliens can file a joint return on Form
Individuals/International-Taxpayers/
day that you are physically present in
1040-C only if both of the following
Taxpayer-Identification-Numbers-TIN.
the country at any time during the day.
apply.
However, you do not count the
1. The alien and his or her spouse
Part I—Explanation of
following days of presence in the
reasonably expect to be eligible to file
Status—Resident or
United States for the substantial
a joint return at the close of the tax
presence test.
Nonresident Alien
period for which the return is made.
Days you commuted to work in the
Generally, you are considered a
2. If the tax period of the alien is
United States from a residence in
resident alien if you meet either the
terminated, the tax period of his or her
Canada or Mexico if you regularly
green card test or the substantial
spouse is terminated at the same
commuted from Canada or Mexico.
presence test for 2019. You are
time.
Days you were in the United States
considered a nonresident alien for the
for less than 24 hours while you were
If Form 1040-C is filed as a joint
year if you do not meet either of these
traveling between two places outside
return, enter both spouses' names,
tests. For more information on
the United States.
identification numbers, and passport
resident and nonresident alien status,
Days you were temporarily present
or alien registration card numbers in
see Pub. 519.
in the United States as a regular
the spaces provided on page 1 of the
member of the crew of a foreign
Green card test. You are a resident
form. Also, include both spouses'
vessel engaged in transportation
alien for tax purposes if you are a
income in Part III and furnish both
between the United States and a
lawful permanent resident of the
spouses' information in Part I of the
foreign country or a possession of the
United States at any time during 2019.
form. It may be necessary to complete
United States. This rule does not
You are a lawful permanent resident
a separate Part I for each spouse.
apply to any day you were otherwise
of the United States if you have been
Identifying number. You must enter
engaged in a trade or business in the
given the privilege, under U.S.
your identifying number where
United States.
immigration laws, of residing
requested at the top of page 1 of Form
Days you intended, but were
permanently in the United States as
1040-C. Generally, this is your social
unable, to leave the United States
an immigrant. You generally have this
security number (SSN). If you do not
because of a medical condition or
status if the U.S. Citizenship and
have an SSN, contact the Social
medical problem that arose while you
Immigration Services (USCIS) (or its
Security Administration (SSA) to find
were in the United States.
predecessor organization, the
out if you are eligible for one.
Days you were an exempt
Immigration and Naturalization
individual. In general, an exempt
Service) has issued you an alien
You can call the SSA at
individual is: (a) a foreign-
registration card, also known as a
800-772-1213 (for the deaf or
government-related individual, (b) a
green card.
hard-of-hearing, call the TTY
teacher or trainee, (c) a student, or (d)
number, 800-325-0778).
-4-
Form 1040-C 2019
a professional athlete who is
nonresident alien. The most common
qualifies you to take the child tax
temporarily present in the United
dual-status tax years are the years of
credit or the credit for other
States to compete in a charitable
arrival and departure. In figuring your
dependents, see the Instructions for
sports event.
income tax liability for a dual-status
Form 1040 or Form 1040NR.
tax year, different U.S. income tax
Line 14, column (b). You must enter
Note. If you qualify to exclude days of
rules apply to each status. You must
each dependent's SSN or ITIN. See
presence in the United States
follow these rules in completing Form
Identifying
number, earlier.
because you are an exempt individual
1040-C. See the Form 1040NR
(other than a
Line 14, column (d). Check the
instructions for details.
foreign-government-related individual)
appropriate box in this column if your
or because of a medical condition or
Note. Certain resident aliens who
dependent is a qualifying child for the
problem, file Form 8843, Statement
leave the United States during the
child tax credit or for the credit for
for Exempt Individuals and Individuals
year may be subject to tax under
other dependents.
With a Medical Condition, with your
section 877A. These resident aliens
Part III—Figuring Your
final income tax return.
compute their tax using the method
prescribed under section 877A when
Income Tax
Closer connection to a foreign
completing Form 1040-C. See
Read the descriptions on line 1 of
country exception. Even though
chapter 4 of Pub. 519 for more
Form 1040-C for Groups I, II, and III to
you otherwise would meet the
information.
see which group(s) applies to you. If
substantial presence test, you are not
Income effectively connected with
Group I or II applies, use lines 15
treated as having met that test for
a U.S. trade or business—nonresi-
through 22 to figure your tax. If Group
2019 if you: (a) were present in the
dent aliens. If you are a nonresident
III applies, use lines 23 and 24 to
United States for fewer than 183 days
alien, the tax on your income depends
figure your tax. If you are a
during 2019, (b) establish that during
on whether the income is or is not
nonresident alien to which both
2019 you had a tax home in a foreign
effectively connected with a U.S.
Groups II and III apply, use lines 15
country, and (c) establish that during
trade or business.
through 24 to figure your tax.
2019 you had a closer connection to
one foreign country in which you had
Income effectively connected with
Line 16. Adjustments. If you are a
a tax home than to the United States
a U.S. trade or business (including
resident alien, you can take the
unless you had a closer connection to
wages earned by an employee) is
adjustments allowed on Form 1040.
two foreign countries.
taxed at the graduated rates that
The Form 1040 instructions have
apply to U.S. citizens and resident
information on adjustments you can
Note. If you meet this exception, file
aliens. Income you receive as a
take. Be sure to consider the tax law
Form 8840, Closer Connection
partner in a partnership or as a
changes noted earlier in
What's
New.
Exception Statement for Aliens, with
beneficiary of an estate or trust is
If you are a nonresident alien and
your final income tax return.
considered effectively connected with
have income effectively connected
a U.S. trade or business if the
Residence determined by tax trea-
with a U.S. trade or business, you can
partnership, estate, or trust conducts
ty. If you are a dual-resident
take the adjustments allowed on Form
a U.S. trade or business.
taxpayer, you can still claim the
1040NR. See the Form 1040NR
benefits under an income tax treaty on
Income from U.S. sources that is
instructions. Be sure to consider the
Form 8833. A dual-resident taxpayer
not effectively connected with a U.S.
tax law changes noted in
What's
New.
is one who is a resident of both the
trade or business is generally taxed at
If you are a nonresident alien and
United States and another country
30%. Your rate may be lower if the
all your income is not effectively
under each country's tax laws. The
country of which you are a resident
connected with a U.S. trade or
income tax treaty between the two
and the United States have a treaty
business, you cannot take any
countries must contain a provision
setting lower rates.
adjustments.
that provides for resolution of
For a list of the types of income not
Adjustments that you take on
conflicting claims of residence
considered effectively connected with
line 16 include the qualified business
(tie-breaker rule). If you are treated as
a U.S. trade or business, see the
income deduction and the excess
a resident of a foreign country under a
instructions for
Schedule A—Income
business loss adjustment figured on
tax treaty, you are treated as a
and
Schedule B—Certain Gains and
Form 461.
nonresident alien in figuring your U.S.
Losses From Sales or Exchanges by
Qualified business income
income tax. For purposes other than
Nonresident Aliens of Property Not
deduction. Generally, taxpayers
figuring your tax, you will be treated as
Effectively Connected With a U.S.
other than corporations are allowed a
a U.S. resident.
Trade or
Business, later. If you are a
deduction of up to 20% of their
For more information go to
nonresident alien in the United States
qualified business income from a
IRS.gov/Individuals/
to study or train, see Pub. 519.
TIP
qualified trade or business. The
International-Taxpayers/Tax-
deduction is subject to multiple
Part II—Dependents
Treaties.
limitations such as the type of trade or
You may be able to claim a tax credit
business, the taxpayer's taxable
Dual-status tax year. A dual-status
for your dependents. To find out if a
income, the amount of W-2 wages
tax year is one in which you have
person qualifies as your dependent,
paid with respect to the qualified trade
been both a resident alien and a
and to find out if your dependent
or business, and the unadjusted basis
Form 1040-C 2019
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