Do I file as dual-status or resident for the entire year after leaving the US mid-year

[alfredwayne]

Hi, I am really hoping someone can help me understand how I should file taxes for 2023. Here are the facts:

• I had been a resident for tax purposes as per the substantial presence test in the US since 2021 and worked in the US from Jan 2023 to July 2023 after which I left for my home country (I am not a US citizen or green card holder)
• I have 0 US-related income since July 2023
• I am planning to return to the US in September 2024

My questions:

• The IRS website mentions "Your residency termination date is December 31, 2023, unless you qualify for an earlier date, as discussed later" - if this is true, then can I just consider myself a resident for the full year and forgo filing 1040NR as part of a dual-status tax return? I thought the day I departed the US in July would mark the "end" of my residency but this website seems to give me an option
• If I choose to be a resident for the entire year, how exactly do I report my foreign income? My foreign company income's tax return is not available yet
• If I do terminate my residence early, do I need to provide a statement of early residency termination? Also, since I don't have any US income after July, what income would I report in my 1040NR? Zero income?

Any help is appreciated. Thanks!

[Vanessa A]

If you have no income from US sources after leaving the US, you would not need to file form 1040NR as you would not have any income to report.  Although, you would technically be a Dual Status Alien, you would not have anything to report during your status as a non-resident if you choose to terminate your residency when you left the country. 

Since you left the US in July of 2023, if you select that date to terminate your residency, then you would only need to file a return that included income for January through July.  Then with no US source income after that, your reporting requirements would end for 2023.  

Yes, you would need to attach a statement to establish your residency termination date.  See page 13 of Pub 519

If you chose to be a resident for the entire year, you would need to figure out a way to get the numbers for the income you earned in 2023 from the foreign company.  Your foreign company would not create a form that fits with the US returns, so you don't necessarily need a form, just the numbers of what you earned. 

[alfredwayne]

Thank you Vanessa! Quick follow-up - Pub 519 Page 13 also says "Residency during the next year. If you are a U.S. resident during any part of 2024 and you are a resident during any part of 2023, you will be treated as a resident through the end of 2023. This applies whether you have a closer connection to a foreign country than the United States during 2023, and whether you are a resident under the substantial presence test or green card test"

If I am planning on returning later this year in Sep 2024, I can just choose to file as a resident for the full year of 2023 correct? And then for 2024 taxes I would be a resident alien once again? That is what I would prefer to do.

So, this means the only thing I need to figure out is how to report foreign income (you are correct, there is no form compatible with US returns, I just need to plug in the numbers). Additionally, I can use the standard deduction as well right, since I am filing as a resident?

[Vanessa A · Accepted solution]

If you are filing as a resident, yes, you can take the standard deduction.

Your issue with filing as a resident based on planning to return in Sept of 2024, is that if something would happen that you would not return to the US, then you would not be present in the US for any part of 2024.

You could always file an extension which allows you to wait until October 15th to file your return.  This way, if you are back in the US by September, you will know for sure you are here and could file your 2023 return. 

When you enter your foriegn income, you will enter it in the foreign income section of TurboTax which is under Other Common Income.