Do I file as a Resident Alien or Dual-Status Alien? Moved out of the US in 2024

[mokomoko]

I am filing as single for 2024. I am not a US Citizen or Permanent Resident. I have been a resident alien based on Substantial presence test since 2022. In mid July 2024, I moved from the US to Canada under a company internal transfer. My sources of income are:

• Jan to Jul in the US: W2, US bank interests and stock/crypto investment 
• Jul to Dec in Canada: Canada T4, Canada bank interest, US stock/crypto investment

According to Publication 519 - Chapter 1 -  Dual-Status Aliens 

• Last Year of Residency
  "If you were a U.S. resident in 2023 but are not a U.S. resident during any part of 2024, you cease to be a U.S. resident on your residency termination date."
• Residency during the next year.
  "If you are a U.S. resident during any part of 2024 (I have a question here, see below) and you are a resident during any part of 2023, you will be treated as a resident through the end of 2023."

I assume this current version of publication 519 also applies to tax year 2024, so I read 2023 as 2024, and 2024 as 2025.

Questions: 

1. If I move back to the US in Oct 2025 which I cannot decide till May 2025, do I have to file as a Resident Alien?

2. If I stay in Canada throughout 2025, can I choose between filing as a Dual-status Alien and a Resident Alien? but if I visit the US for vacation, does that count for this "If you are a U.S. resident during any part of 2024" ?

Hope this makes sense. Thanks!

 

[pk]

@mokomoko  

(a) the best  US tax option would be for you to stay in Canada at least a full year or more .  I say this because if you keep your residency then you possibly can have  "foreign tax home and be able to exclude  Candain income from US taxes ( Only be taxed  by Canada )  This depends on the kind of accommodation with your employer.

(b)  Yes you can give up your H-1B  visa when you leave US and thereby  be a dual status ----  By leaving  in  July of 2024  you would have met the SPT   --- be taxed on world income during the "present " period.  For the rest of the year you are Non-Resident ( not physically present -- NRA ) and be taxed ONLY on US sourced income.

Note that SPT is on an annual basis ( but in fact if you were a  resident for the year before , you wil very easily meet the  SPT for the current year ).

Is there more I can do for you ?

[mokomoko]

I was not on H1b though. My I20 was expired in June so I left in July within the grace period. I will definitely stay in Canada over a year. Anyways, so are you suggesting that I'd better go with Dual status this year? 

[pk]

@mokomoko  , sorry , my assumption was wrong ( assumed H-1 and that  your work visa had not expired ).  Since that is the case , please tell me more :

1. Which country are you from ( citizen of ) ?

2. When did you arrive in  the US , which visa  and when did you exactly leave the USA ?   Since you are talking about internal  transfer , were you on L  visa ?  Why did your employer not try to extend that instead of transferring?  Or were you on J visa.

3.  Does your employer plan to bring you back to US ?  What is your longer term plan ?

I am asking all these  ( intrusive  ) questions because  I need to understand  the situation -- am quite confused.  If  you are uncomfortable answering these in public forum , you can PM me.

[mokomoko]

1. see PM 

2. 3. I was on F1 OPT for my job and failed to get selected for H1b. I became RA for tax in 2022. My I20 expired in mid June 2024 and I left the US mid July 2024. I got Canada PR in 2024 and my company transferred me to their Canadian entity. If I get H1b in 2025 or 2026, my company will want me to move back to the US whenever H1b starts which is normally Oct. so sadly I won't know the exact plan until I get selected. 

let's say if I move back to the US because of H1b in Oct 2025, I guess I should be a US tax resident for both 2024 and 2025 based on publication 519 and SPT test. For 2024 and 2025, clearly I'm also a resident in Canada. Does it lead me to the tie breaker rule, hence Canada will take precedence?