Tax residency after moving out of USA

[chrisKa]

I have some questions regarding my tax residency for 2024, please see below the bullet points that explain my situation for 2024:

• I have been a non-resident alien in the USA since 2017, and a resident alien since 2019.
• In 2024 (July 18th) I permanently moved outside of the USA, to Germany.
• In 2024, while I was in Germany, I had employment income and income taxes deducted from my German employer, as well as interest income (and relevant tax deducted) from a German Savings account.
• In 2024, while I was in the USA, I had W-2 income and income taxes deducted through my employer.
• Throughout the year 2024 (every month) I received reportable interest income (1099-INT) from a Savings account in the USA.
• I didn't have non-USA-sourced income while I was in the USA.
• I didn't have USA-sourced income while I was outside the USA apart from my USA savings account interest as mentioned above.
• I am a citizen of Cyprus.
• I am married and my spouse didn't have any income either in the USA or Germany.

My questions are:

• Am I a resident alien for the full year of 2024?
  • If yes, I understand that I should report my German income on my 1040. But how can I exclude my German income from being doubly taxed? How can I use the foreign earned income exclusion, or somehow deduct the taxes that I already paid in Germany for my German-sourced income?
  • If not, do I need to file my taxes as dual-status individual where I file both 1040 and 1040NR for the periods of being in USA and Germany, respectively? In this case, do I also need to "split" and report my USA Savings account interest in both forms for the corresponding periods of being a resident alien and non-resident alien? Other than this interest income, I don't have any other US-sourced income to report on the 1040NR form for the period of being a non-resident alien. Also, are there any limitations for being a dual-status individual?

I appreciate the help.

[pk]

@chrisKa , while I digest your  detailed post, please can you tell me the following:

(a) Which visa were you under while living in the USA -- 2022, 2023 & 2024?

(b) How did you file for the tax year 2023 ?

(c) Did your work visa expire when you left the USA or what ?

(d) Did you have withholding during  tax year 2024?

(e) When exactly did you leave the US in 2024?

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

[chrisKa]

Thanks for the reply. Here are the answers to your questions:

a) I was under O1-A Visa status from July 2021 until July 2024. J-1 status from Aug. 2017 until July 2021.

b) I filed as resident alien for 2023.

c) Yes, my Visa was expiring and I decided to move out of USA.

d) Yes, I had withholding in 2024 through my employer.

e) I left the USA on July 18th 2024.

[pk]

@chrisKa 

Based on the answers  that you have kindly provided :

(a) For tax year 2024, you would be best served  ( tax beneficial ), by  filing as a dual status person.

                  1.  As a Dual Staus person, you file a form 1040 covering  your wages while present in the USA .  Germany would also tax you on your world income once you became a resident of Germany.  Thus there is no  FEIE or FTC to consider  ( except  for the interest earning).

                   2.   For the  Non-Resident period  , your German earnings are not under the purview of the USA and not taxed .   You report your US  source income ( interest earning ) as an NRA using form 1040-NR  ( Not supported by  TurboTax -- have to  download  from IRS  --fillable  .pdf OR use a local tax professional or ?? ).  Note that generally  ( often a bone of contention ) interest earnings are sourced to the state where the taxpayer is a resident of. -- this is strictly observed  for US states  but IRS will generally oppose this  when countries are concerned.  However, the tax on the interest income is generally not much  ( NRAs may be  taxed at 30% though and therefore   a perusal of the US-Germany treaty  is strongly suggested).   You can also  file for a tax credit on this portion with Germany since you are resident of Germany during the NRA period.

                    3. One  problem with this  "double-status "  filing is that you have to use itemized deduction for the 1040 filing, because  you did not stay here for a full calendar year.

(b)  If you choose to file as a resident for the year 

                  1.  You file only form 1040 ( fully supported by TurboTax ) -- you can  e-file.

                   2.  AS long you file after  completing a test period of continuous 12 months in which you meet the  330 days  out of the country ( USA ) , have a foreign tax home,  you can exclude  your Foreign earned income from US taxes.

                 3. This also allows you to use standard deduction.

                 4. For the tax year 2025 onward you do n ot need to file a US tax return, if you do not have any US sourced in come.

Is there more  can do for you ?   If you want more  help , please consider adding to this thread or PM me (  just NO PII -- Personally Identifiable Information) and I will most happy to help.

pk

[lfg13c]

Hi there, 

I'm in a similar situation. Could you expand on point b)2. I'm considering filing as a resident for the year. However, I want to make sure I pass the test period - I stopped working on May 12th but didn't leave the US until June 27th, 2024, so technically it's not been a year since I left. I've lived in the UK since June of last year. 

[pk]

@lfg13c  please can you tell me more of the situation;

(a) when did you come in to the USA and when did you leave  ( exact dates please ) and  with which visa ?

(b) did you visa expire  or you just chose to leave the USA?  If the latter, did you take any steps to inform US Immigration that you have left the country ?

(c) Are you a UK citizen / work-permit / or what ?  If not a UK citizen. citizen of which country ?

The m ore you are able to tell me, the better focused my answer will be.  If your information is not of general interest or for other reasons you choose to, you can PM me  ( just NO PII -- Personally Identifiable Information ).

Note that , if  you do not owe any taxes to the USA, and   you are abroad on the Tax filing day ( April 16th.) your filing day is June 16th  -- the pay day is  still the April date.

Look forward to hearing from you 

pk