would I get full tax refund if I stayed less than 6 months in an year

[santoshpaluri]

Hello, 

I have been in the US since last 9 years on H1B and have been filing taxes as resident alien, married filing jointly. I am planning to move back to my home country next summer 2024. My question is if I move back before 6 months of 2024, i.e say for ex I move back on Jun15th 2024, and that is less than 6 months of 2024, would I be eligible to get all my federal tax as refund at the end of the year as I did not even stay for 6 months in 2024? Please clarify so that I can plan accordingly. Thanks

[pk]

@santoshpaluri , Namaste ji,

(a) Each year residency status is determined  based on passing the Substantial Presence Test for that tax year ---

183 days present  in US   when all the days present in current tax year  PLUS 1/3  the days present in previous year PLUS 1/6 the days present  in the 2nd previous year-- is. for you all days present 2024, 1/3rd the days in 2023 , 1/6th the days in 2022..   All this does is to allow you to report your income and deduction on form 1040 and be taxed on your world income.

(b) If you leave  the USA sometime before the end of 2024 ( 12/31/2024 ), you may still be a resident for the period you are here  and a Non-Resident for the rest of the year ( thus avoiding  being taxed on any income  from  your home country post departure)-- Dual Status .  The issue here becomes  the deduction --- you will be forced to use "Itemized  Deduction" because  as a dual status person you cannot allocate / use standard deduction and this would have significant effect on your taxable income.  So most people would suggest  either leaving early in the year or stay the whole year and leave perhaps around 12/31/ of the year.

(c) I do not understand your ref to return of withholding -- your withholding  and refund therefrom is based on reconciliation of your total  earnings, tax liability  and does not matter when you become a Non-Resident Alien, except  for the fact that your offsets ( deductions  -- standard or otherwise ) to income get affected whether you can take advantage of  the usual & higher standard deduction.  If you are using Itemized deduction all the time then a shorter year ( due to becoming a Non-Resident  ) may  or may not matter -- because your itemized deduction is higher than standard  deduction anyways .

 This same logic is applicable for expats also -- when I was an expat , we generally tried to return back to USA around the start of the year -- thus allowing the full benefit of the standard deduction and Foreign Earned Income Exclusion.

Is there more I can do for you ?

Namaste

pk

[santoshpaluri]

Thanks for answering my question. I still did not understand if it is better to leave before June 2024 or by july or August as I cannot stay beyond Aug anyways, so staying till end of the year is not an option. I mean, as I will stay for full year 2023 , and min of 5 months in 2024, I will definetly pass the 183 rule and probably be still a resident alien. But as I have an option to either leave before June 30 2024 or to stay a couple of months beyond that, my question is if I leave early like June 1st 2024, and when I file the tax returns at the end of year, would I be eligible to get the tax returns as I stayed less than 6 months for 2024 or it does not matter? Thanks

[kiransaravi]

Hi

 have you found out the answer? i have a similar situation

[pk]

@kiransaravi , Namaste ji.

Are you still looking for an answer ?   This being a very old thread, could you please tell me more about your situation ?  Please.

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

[kiransaravi]

Hi, 

I lived in US for about 10 years continusouly, and I'm planning to relocate to India around May 2025.

In this case, I'll be living and earning in US for only 5 months in 2025 tax year. So, when i file my taxes after the year closes, will I get a full tax refund of fed and state as I didn't live beyond 180 days in the given year?

Thanks.

[pk]

@kiransaravi , 

(a) having lived  in the USA for a long time  ( and depending on your  visa ) may require you get an exit clearance from the IRS.  Please tell me more about  the 10 years  --  when did you enter the country and with which visa;  were there any status adjustments, are you married and if so to whom ( US citizen/ GreenCard  or to an NRA ) ?

(b) generally  if you are a resident for tax purposes ( having passed the Substantial Presence Test -- SPT ), you are taxed on your world income  by the US.  Else  you are taxed ONLY on US sourced income.  In no case  would your  liability be zero i.e. all your withholdings be returned.  AS a student however, you may get any FICA withholding  back  ( if your country has a  totalization agreement with the USA )------which country are you from ?

( c)  do you own any assets  here in the  USA -- stocks/ bonds/ savings account / house etc. etc. ?

 (d) also note that  if you leave the country  before a full calendar year,  you cannot use standard deduction and must use itemized deduction.

I will circle back once I hear from you -- yes ?     If your situation is too specific and/or you do not want to share the answers on this public board, you can PM me .

pk