Residency for tax purposes after leaving the US

[Illia]

Hi,

My parents have been in the US since January 2023 on J1 and J2 visas. They were NRAs during 2023 and 2024 as they were excluded from the substantial presence test for the first 2 years. They have become US residents for tax purposes since Jan 1st 2025. They left the US in September 2025 and are not planning to return in 2025. They may be visiting in 2026 but not more than for a week or two. They will have no US income other than savings bank account interest in the remainder of 2025 and in 2026. My question is whether they can file a joint tax return as US residents for the entire tax year 2025 and claim standard deduction if they report the foreign income for 2025. Are they required to file a non-resident tax return for 2026 if they only get interest income form a savings account in the US in 2026? They will not be present in the US for 30 days or more in 2026.

Thank you 😊

[pk]

@Illia , 

a few questions first before I opine:

(a) Which country are they from and are they both resident and citizen of that country ?

(b) When did they enter the US with J visa  and exact date when they left the UJSA ?

(c) Did they file any forms with the IRS  or Immigration stating that they are leaving the US  or was it just their employment/research visa terminated ?

(d) Should I assume that their ONLY financial connection to US post departure is passive income -- bank interest ?  Or is there more  and substantial connection ?

 Generally , I would try return with two different scenario ( assuming there are no other contravening  facts :(

1.  AS a dual status  --- Jan 01 2025 through Sept. 30th Sept -- Resident and being taxed on world income, itemized deduction and  1040-NR for  earnings ( US sourced ONLY ) for the last quarter of the year 2025

2. AS a resident for the whole year, form 1040, taxed on world income, standard deduction and allowing foreign earnings to be taxed by the USA, foreign tax credit  for the taxes paid to home country.  This is assuming that there is  no contravening facts .

I will circle back once I hear from you --yes ?

[Illia]

Hello @pk 

I was hoping you would look into this for me. This is greatly appreciated!

Here are my answers:

(a) Which country are they from and are they both resident and citizen of that country? - They are both citizens of Ukraine. I am not sure they can be considered residents of Ukraine as they have not been living there since March 2022. They visit Ukraine once in a while but do not stay there for more than a couple of weeks per year.

(b) When did they enter the US with J visa  and exact date when they left the UJSA ?  - They have entered the US with J visas in January 2023. Since then they have stayed in the US for the majority of time, however they had a few short trips abroad. These trips combined do not change the fact that they have met substantial presence test in the US in 2025. They have left the US on September 14th 2025.

(c) Did they file any forms with the IRS  or Immigration stating that they are leaving the US  or was it just their employment/research visa terminated ? - They have not filed anything with the IRS or Immigration except for 1040 NR for tax years 2023 and 2024. The reason for leaving the US in Sep 2025 was due to the end of the employment/research visa.

(d) Should I assume that their ONLY financial connection to US post departure is passive income -- bank interest ?  Or is there more  and substantial connection ?  - There is no other connection except bank interest and a 401k.

 Generally , I would try return with two different scenario ( assuming there are no other contravening  facts :(

1.  AS a dual status  --- Jan 01 2025 through Sept. 30th Sept -- Resident and being taxed on world income, itemized deduction and  1040-NR for  earnings ( US sourced ONLY ) for the last quarter of the year 2025

2. AS a resident for the whole year, form 1040, taxed on world income, standard deduction and allowing foreign earnings to be taxed by the USA, foreign tax credit  for the taxes paid to home country.  This is assuming that there is  no contravening facts . - The second scenario is preferable if allowed by regulations since it not only allows for standard deduction but also for filing jointly. Since my father has no income it can make a big difference.

Best,

Illia

[pk]

@Illia , thank you for your answers to my questions.

(a) Have gone through the US-Ukraine tax treaty again and while there are  significant differences  ( from many others that I am aware of ) in articles treating students, researchers etc., there is nothing  that precludes  a resident/ national from "extending" tax residency .  However, I do note that Ukraine also determines tax residency  based on citizenship ( when there is ambiguity in tax residency). Also that Ukraine taxes its residents based on world income.

(b) Noting that for US immigration purposes, a J visa holder  is allowed 30 days of stay-over at the end of  contract with the sponsor  ( J visa sponsoring org.)

Therefore my conclusion that  there is nothing preventing your parents filing a MFJ for the whole of 2025 as long as they include /allow /recognize  their world income for the entire  calendar year.  For 2026 they then have only 1040-NR to file covering any US sourced income.

Unless they plan to come back to US, they should consult with a tax-professional (familiar with  international taxation) on how to proceed with tax deferred accounts like 401(k) or similar.

Is there more I can do for you ?

pk

[Illia]

Thank you so much for your help @pk !

This answers my questions.