Thanks for the follow-up, @pk! That's the situation we're in. However, it would be more advantageous for us to file as full year residents in the US (e.g., the standard deduction is not available in dual status returns), and use the DTA between Ireland and the US to avoid double taxation on Irish employment income, but I'm not 100% sure we can do that.
According to Pub 519 for preparing 2024 returns (Last Year of Residency:(
If you were a U.S. resident in 2024 but are not a U.S. resident during any part of 2025, you cease to be a U.S. resident on your residency termination date. Your residency termination date is December 31, 2024, unless you qualify for an earlier date, as discussed later.
Applying this to 2025 returns, our residency termination date will be December 31, 2025 (unless we elect for an earlier date), so under this rule we should be able to file as residents for the full year (2025).
However, Pub 519 also says (Effect of Tax Treaties:(
If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be treated as a U.S. resident. For example, the rules discussed here do not affect your residency time periods, as discussed under Dual-Status Aliens, later.
According to this rule, the Last Year of Residency rule does not change, but when it comes to figuring our US income tax, our Irish residency under the tiebreaker rules of the Ireland-US DTA compels us to file as nonresidents in the US anyway. Am I interpreting this rule correctly, or could it mean that we will be treated as nonresidents in figuring our US income tax only in respect of income for which tax treaty benefits are claimed? Although I’d like it to be the latter, this rule reads as if we will be treated as nonresidents overall.
