What Form 1040-C Is For
Form 1040-C (2011) is used to determine and settle any departing alien income tax you owe before leaving the United States. The IRS reviews both income received and the income you expect to receive through your departure date to estimate your taxable income and any tax liability. Once reviewed, they may issue a departure permit, also known as a sailing permit, confirming that you have met your tax obligations. This procedure guarantees the payment of all necessary income taxes prior to your departure.
When You’d Use Form 1040-C
You would use Form 1040-C when you plan to leave the United States and need to clear your tax obligations for the current tax year. The form is required for many resident aliens and nonresident aliens who received taxable income during their time in the country. Key situations include:
- You plan to depart and must file no earlier than 30 days before travel and at least two weeks before your departure date.
- You are leaving between January 1 and April 15 and must file your preceding tax year income tax return before receiving a departure permit.
- You need to appear at a local IRS office with documents verifying income received, tax withheld, and your expected tax liability for the year.
- You are not eligible to use Form 2063, which applies only to certain students, short-term visitors, and others with limited or no taxable income.
Visit our Wage Garnishment Protection page to learn how the IRS may enforce collection if tax obligations remain unresolved before departure.
Key Rules or Details for 2011 Filers
When filing IRS Form 1040-C (2011), the IRS reviews your status as a resident alien or nonresident alien to determine how your taxable income and tax liability should be calculated before you leave the United States. The rules focus on the income you received during the tax year and any income you expect to receive through your departure date.
- Who must file: Most resident aliens, nonresident aliens, and visa holders with U.S. source income must complete the form. This includes individuals with wages, business expenses, capital assets, rental income, or fellowship grants. Those who have received taxable income generally need to file a tax return.
- Common exemptions include individuals who do not need to file, such as those holding a diplomatic passport, those performing official services for foreign governments or international organizations, and short-term business visitors. Certain alien military trainees, commuters from Canada or Mexico, and specific students or trainees are also exempted.
- Filer groups:
- Group I – Resident Aliens: Resident aliens are required to report all income from worldwide sources in accordance with standard U.S. tax rules.
- Group II – Nonresident Aliens With Effectively Connected Income: These individuals must report wages, business income, and other items connected to a U.S. trade or business.
- Group III – Nonresident Aliens With U.S.-Source Income Not Effectively Connected: These taxpayers are usually taxed at flat withholding rates on items such as interest or dividends.
- Payment Rules: Some filers are required to pay their expected tax liability during the appointment. The IRS may accept a bond guaranteeing payment if immediate payment is not possible.
- Tax treaty rules: Certain taxpayers are eligible for special tax treaty benefits, which may reduce withholding or impact how income is taxed.
Step-by-Step (High Level)
To file Form 1040-C as a departing alien income tax return, follow these basic steps before your departure date.
- Gather documents: Collect past income tax returns filed, proof of income taxes paid, bank records, pay statements from each employer showing wages paid, and income tax withholding. Also, include records of capital assets or personal property sold, as well as statements for business expenses. Bring your passport, alien registration card, taxpayer identification number, or individual taxpayer identification number, and any documents indicating treaty benefits.
- Schedule your appointment: Call a local IRS office or an IRS office that handles departing aliens and set an appointment to file Form 1040-C and request a departure permit or sailing permit.
Part I – Alien Status and Identification
Provide information about your immigration status, visa category, residency, and travel plans.
Part II – Exemptions
List dependents claimed and any allowed exemptions based on your status and treaty rules.
Part III – Income and Tax Calculation
Report income received and expected, then complete the tax computation section and related schedules (A–D) to determine any tax paid or balance due.
Common Mistakes and How to Avoid Them
Filing Form 1040-C can move smoothly when you prepare ahead and avoid these common issues:
- Scheduling the IRS appointment too late: Schedule your appointment as soon as your plans are set.
- Misunderstanding residency status: Review IRS residency tests before completing the form.
- Forgetting expected income: Include all income you reasonably expect to receive before leaving.
- Missing documentation: Please gather all necessary identification and financial documents before your appointment.
- Assuming Form 1040-C is a final return: Plan to file your regular income tax return—such as Form 1040 or Form 1040-NR—after the tax year ends.
What Happens After You File
After you submit Form 1040-C at a local IRS office, the agency reviews your records, verifies estimated tax payments, and checks the tax owed under U.S. income tax rules. If everything is complete, you receive a tax clearance certificate that allows you to travel with your airline ticket. When a nonresident alien leaves the United States—whether self-employed, on a business trip, or employment-authorized—the IRS may apply withholding tax or require a bond. This process does not replace your final income tax return, and foreign nationals must still follow all immigration requirements.
FAQs
Do I still need to file an annual income tax return after completing Form 1040-C?
Yes, Form 1040-C does not replace your yearly filing. You must still submit the appropriate income tax return—such as Form 1040 or Form 1040-NR—after the tax year ends.
Can spouses file joint returns when completing an alien income tax return?
Spouses may file joint returns only if both qualify as resident aliens for the year. If either spouse is a nonresident, each must file separately when completing an alien income tax return.
What documents should I bring to my IRS appointment when requesting a departure permit?
Bring identification, proof of wages, records of income tax paid or withheld, travel details, and supporting financial documents. These help the IRS decide whether a departure permit can be issued.
How do tax treaties affect income tax returns filed by departing aliens?
A tax treaty may reduce or exempt certain income from U.S. tax. These rules can impact income tax returns filed after departure and may alter how income is reported on Form 1040-C.
Are departure permits always required when a nonresident leaves the United States?
Most departure permits are required when a departing alien has earned U.S. income. The IRS reviews your information before allowing travel.
