Residency Question for F1 Student Who Left the Country Mid-Year

[TaxhelpNB]

Hello, I'm turning to this forum in hopes that someone can help me: I am a Dutch citizen and I was in the US for 18 years on an F1 visa, getting various degrees. I became a tax resident in 2012 and I left the country on July 20, 2025 after I completed a postdoc on OPT. I returned to the Netherlands, where I had no income at all for the remainder of 2025. I completed paperwork with the IRS before departure to show I did not have any tax liability before leaving. In November 2025 I returned for a 2.5 week visit, and in December 2025 I was back for a 6-day conference.

My question is whether I can legally be a tax resident the whole year instead of a dual status individual. Based on my presence in previous years, I calculated that I meet the SPT for 2025. Pub 519 seems to suggest that there is a choice (i.e not declare that I want residency to end earlier). It is obviously fiscally advantageous to remain a tax resident since I could use the standard deduction and I wouldn't have any income in the Netherlands to include. However, I don't want to do the wrong thing here. TIA

[DaveF1006]

Yes, because you meet the Substantial Presence Test (SPT) for 2025 and were a resident in the prior year (2024), the "General Rule" for residency applies to you.

Under the IRS General Rule, if you meet the SPT, your residency status lasts from January 1 through December 31. While there is an "exception" that allows you to end your residency early (Dual-Status), you are not required to take it.

[TaxhelpNB]

Thank you! This is very helpful. How about the Indiana return? Does that follow the same rules? Thanks again! 

[DaveF1006]

Yes, the rules are different for Indiana. Because you left Indiana mid-year, Indiana generally classifies you as a Part-Year Resident. Unlike the federal "General Rule" that allows you to remain a resident for the full year after meeting the Substantial Presence Test, Indiana's residency typically ends the day you physically move out with the intent to live elsewhere.

You'll need to fill out Form IT-40PNR if you lived in Indiana for only part of the year or if you were a nonresident. When you start your Indiana State return, just enter the dates you lived in the state. Your tax software will automatically create Form IT-40NR to report only the income you earned while in Indiana.

 

 

[TaxhelpNB]

Thank you! Something odd is happening and I'm not sure how to go about it. In the "My Info" tab, there is a question "what was your state of residence on Dec 31 2025." If I am filing federal taxes as a full year resident, do I put Indiana or foreign country? 

If I put foreign country, the Indiana return will automatically go to partial resident, and it'll say "Based on your federal return, we've selected the following Indiana residency status for you: part-year." However, when I check everything and go back to the overview, where turbotax lists the type of return, it is listed as nonresident. Am I missing something here? 

[DaveF1006]

If this is mentioned in your Indiana  State return, Indiana uses Form IT-40PNR for both groups. The "PNR" stands for Part-year and NonResident.

In the TurboTax "Overview" or "Status" screen, it often defaults to the label "Nonresident" as a shorthand for anyone filing the IT-40PNR, even if your specific status within that form is "Part-Year Resident". 

Regarding the question, "What was your state of residence on December 31, 2025?, you need to select "Foreign Country" (or "Foreign or U.S. Possession" depending on the version).

@TaxhelpNB