You are a dual-status individual when you have been both a U.S. resident and a nonresident in the same tax year. Dual status does not refer to your citizenship, only to your resident status for tax purposes in the United States. In determining your U.S. income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. The most common dual-status tax years are the years of arrival and departure. A dual status individual must file a dual status return as described in Publication 519, U.S. Tax Guide for Aliens. Dual-status individual – First-year choice A nonresident who becomes a U.S. resident under the substantial presence test in the following tax year may choose to be treated as a dual status resident for this taxable year if certain tests are met. Refer to the First-Year Choice topic of Chapter 1 in Publication 519, U.S. Tax Guide for Aliens. Tax treaties Most tax treaties contain an article which defines tax residency for purposes of the treaty. Tax residency determined under the residency article of a tax treaty may differ from the residency provisions of the Internal Revenue Code. Dual-status individual married to a U.S. citizen or resident A dual status individual married to a U.S. citizen or to a U.S. resident may elect to file a joint income tax return with their spouse. Refer to Nonresident Spouse Treated as a Resident. For the part of the year you are a U.S. resident For the part of the year you are a U.S. resident, you are taxed on income from all sources. Income from sources outside the United States is taxable if you receive it while you are a resident. For the part of the year you are a nonresident For the part of the year you are a nonresident, you are taxed on income from U.S. sources only. Not effectively connected income Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident. Income from U.S. sources Income from U.S. sources is taxable whether you receive it while a nonresident or a resident of the U.S., unless specifically exempt under the Internal Revenue Code or a tax treaty provision. Generally, tax treaty provisions apply only to the part of the year you were a nonresident. However, an exception to this rule exists. Refer to "Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens" found in Chapter 9 of Publication 519, U.S. Tax Guide for Aliens. When determining what income is taxed in the United States, you must consider exemptions under U.S. tax law as well as the reduced tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. Restrictions for filing dual-status tax returns The following restrictions apply if you are filing a tax return for a dual-status tax year: You cannot use the standard deduction allowed on Form 1040, U.S. Individual Income Tax Return. However, you can itemize certain allowable deductions. For tax years beginning after December 31, 2017, taxpayers cannot claim a personal exemption deduction for themselves, their spouses, or their dependents. Refer to Repeal of Personal Exemptions. As a dual-status taxpayer, you may be able to claim a dependent on your tax return. In general, a dependent is a qualifying child or a qualifying relative. You may be entitled to claim additional deductions and credits if you have a qualifying dependent. See the Instructions for Forms 1040 and 1040-SR or Form 1040-NR for more information. You cannot use the head of household Tax Table column or Tax Rate Schedule. You cannot file a joint return. However, a dual-status individual who is married to a U.S. citizen or resident may elect to file a joint return with their spouse. Refer to Nonresident Spouse Treated as a Resident for more information. If you are a nonresident and married to a U.S. citizen or resident for all or part of the tax year, and you do not choose to file jointly with your spouse, you must use the Tax Table column or Tax Rate Schedule for married filing separately to figure your tax. You cannot use the Tax Table column or Tax Rate Schedules for married filing jointly or single. If you are a nonresident and married to a U.S. citizen or resident, you may not take the earned income credit, the credit for the elderly or disabled, or an education credit unless you elect to be taxed as a resident jointly with your spouse in lieu of these dual-status taxpayer rules. Different rules When you figure your U.S. tax for a dual-status year, you are subject to different rules for the part of the year you are a U.S. resident and the part of the year you are a nonresident. Effectively and not effectively connected income All worldwide income for your period of U.S. residence and all income that is effectively connected with a trade or business in the United States for your period of nonresidence, after allowable deductions, is combined and taxed at the rates that apply to U.S. citizens and residents. Income that is not connected with a trade or business in the United States for your period of nonresidence is subject to the flat 30% rate or lower treaty rate. You cannot take any deductions against this not effectively connected income. Refer to Taxation of Nonresident or Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for more information. Resident vs. nonresident filing procedures The U.S. income tax return you must file as a dual-status depends on whether you are a U.S. resident or a nonresident at the end of the tax year. Resident at end of year You must file Form 1040, U.S. Individual Income Tax Return, if you are a dual-status taxpayer who becomes a U.S. resident during the year and who is a resident of the U.S. on the last day of the tax year. Write "Dual-Status Return" across the top of the return. Attach a statement to your return to show the income for the part of the year you are a nonresident. You can use Form 1040NR, U.S. Nonresident Alien Income Tax Return as the statement, but be sure to write "Dual-Status Statement" across the top. Nonresident at end of year You must file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U.S. resident on the last day of the tax year. Write "Dual-Status Return" across the top of the return. Attach a statement to your return to show the income for the part of the year you are a resident. You can use Form 1040, U.S. Individual Income Tax Return as the statement and write "Dual-Status Statement" across the top. Statement Any statement must have your name, address, and taxpayer identification number on it. You do not need to sign a separate statement or schedule accompanying your return, since your signature on the return also applies to the supporting statements and schedules. When and where to file If you are a U.S. resident on the last day of your tax year and report your income on a calendar year basis, you generally must file no later than April 15 of the year following the close of your tax year. For additional information, refer to the Instructions for Form 1040, U.S. Individual Income Tax Return. If you are a nonresident on the last day of your tax year and you report your income on a calendar year basis, you generally must file no later than April 15 of the year following the close of your tax year if you receive wages subject to withholding. If you did not receive wages subject to withholding and you report your income on a calendar year basis, you must file no later than June 15 of the year following the close of your tax year. For additional information, refer to the Instructions for Form 1040-NR, U.S. Nonresident Alien Income Tax Return Related Publication 519, U.S. Tax Guide for Aliens Taxation of U.S. Residents Taxation of Nonresident Aliens Dual Status Individuals Foreign Students and Scholars
