Form 1040-C: U.S. Departing Alien Income Tax Return (2017)
What the Form Is For
Form 1040-C is a specialized tax document that certain non-U.S. citizens must file before leaving the United States. Think of it as a pre-departure tax checkpoint rather than your regular annual tax return. The form serves as proof that you've settled your U.S. tax obligations for the current year up to your departure date. When the IRS approves your Form 1040-C, they issue a "certificate of compliance"—commonly called a sailing permit or departure permit—which demonstrates you're leaving the country in good tax standing.
This form is specifically designed for aliens (the IRS term for non-U.S. citizens) who need to report income they've received or expect to receive during the tax year and pay the anticipated tax on that income before departing. The form covers three categories of filers: resident aliens (those with green cards or who meet substantial presence requirements), nonresident aliens with U.S. business income, and nonresident aliens with investment or passive income from U.S. sources. Importantly, Form 1040-C does not replace your regular annual tax return—you'll still need to file Form 1040, 1040NR, or another appropriate return after the tax year ends.
When You'd Use Form 1040-C
You must file Form 1040-C if you're a non-U.S. citizen planning to leave the United States or its possessions and you don't qualify for one of several specific exceptions. The timing is critical: you need to visit an IRS office at least two weeks before your departure date but no more than 30 days in advance. Both the early window and the late deadline matter—file too early and they won't process it; wait too long and you might not receive your certificate in time to leave.
Several categories of people are exempt from filing Form 1040-C. You don't need this form if you're a foreign diplomat with a diplomatic passport, certain students or exchange visitors on F, J, H-3, M, or Q visas who earned only authorized income or scholarship funds, business or pleasure visitors staying fewer than 90 days with B-1 or B-2 visas, people simply passing through the U.S., Canadian or Mexican residents who commute to work in the U.S. with tax withholding, or military trainees on official orders. However, if you received taxable U.S. income outside these narrow exceptions, you'll likely need to file.
The form doesn't have "late" or "amended" versions in the traditional sense. If you've already departed and didn't file when required, you face potential penalties and tax collection issues, but you should still file your regular annual return. If you previously filed Form 1040-C and need to correct it, you would typically address any corrections on your final annual tax return for that year rather than amending the 1040-C itself.
Key Rules or Details for 2017
Determining Resident vs. Nonresident Alien Status
Understanding your tax status is fundamental to completing Form 1040-C correctly. You're considered a resident alien if you hold a green card or meet the substantial presence test—meaning you were physically present in the U.S. for at least 31 days during 2017 and a total of 183 days when counting all of 2017, one-third of your 2016 days, and one-sixth of your 2015 days. Resident aliens report worldwide income and can claim the same deductions and credits as U.S. citizens. Nonresident aliens, on the other hand, only report U.S.-source income and face more restrictions on deductions.
2017 Personal Exemptions and Standard Deductions
For 2017, personal exemptions were $4,050 per person (including yourself, your spouse, and dependents), though these phase out at higher income levels starting at $156,900 for married filing separately. Standard deductions were $12,700 for married couples filing jointly, $9,350 for heads of household, and $6,350 for single filers or married filing separately, with additional amounts for those age 65 or older or blind. Tax rates ranged from 10 percent on the lowest income brackets to 39.6 percent on the highest incomes.
Effectively Connected Income vs. Passive U.S.-Source Income
Income effectively connected with a U.S. trade or business—including wages from employment—is taxed at graduated rates just like U.S. citizens pay. However, nonresident aliens with passive income from U.S. sources (like interest, dividends, or rents not connected to a business) face a flat 30 percent tax rate, though tax treaties may reduce this rate. If you're entitled to treaty benefits that reduce your tax, you must attach a statement explaining the specific treaty article and your computation.
Step-by-Step (High Level)
Gather Your Documentation
Start by gathering your documentation well in advance. You'll need your passport with visa or alien registration card, copies of tax returns from the past two years (or however long you've been in the U.S. if less), receipts proving you paid those taxes, and statements from all 2017 employers showing wages and withholding. If you're self-employed, prepare an income and expense statement through your departure date. Also collect proof of estimated tax payments, documents about any property sales, scholarship information if applicable, and evidence of treaty benefits you're claiming.
Schedule an IRS Appointment
Schedule an appointment at your local IRS office, keeping in mind that some offices require appointments made well in advance. Plan to visit at least two weeks before departure but no more than 30 days early. If you're married and your spouse is also a departing alien, both of you must attend the appointment together. Bring all your gathered documents plus verification of your taxpayer identification number (Social Security number or Individual Taxpayer Identification Number) and proof of your departure date like an airline ticket.
Complete the Parts and Schedules of Form 1040-C
Complete Form 1040-C, which has three main parts. Part I establishes whether you're a resident or nonresident alien and asks detailed questions about your stay, visa status, and plans to return. Part II covers exemptions—how many you can claim depends on your status and nationality. Part III is where you calculate your actual tax, using Schedule A to report all income, Schedule B for capital gains if applicable, Schedule C for deductions, and Schedule D to compute your final tax liability.
File the Form and Obtain Your Certificate
File both an original and one copy of Form 1040-C with the IRS office. You must also file any overdue tax returns from previous years and pay any taxes owed. If your Form 1040-C shows you owe tax and the IRS believes your departure might hinder collection, you'll need to pay the tax or post a bond before receiving your certificate. Once approved, an IRS official signs the certificate of compliance section on page 2 of your form—this signed certificate is your sailing permit.
Common Mistakes and How to Avoid Them
Misunderstanding the Filing Window
One of the most frequent errors is confusion about the filing window. People either show up too early (more than 30 days before departure) or wait until the last minute, discovering too late that their local IRS office requires appointments scheduled weeks in advance. Mark your calendar and make your appointment as soon as your travel dates are confirmed. Remember, this form cannot be filed by mail—you must appear in person.
Treating Form 1040-C as the Final Tax Return
Many filers mistakenly believe Form 1040-C is their final tax return for the year and never file Form 1040 or 1040NR afterward. This is wrong. Form 1040-C is only a pre-departure snapshot covering income through your departure date. You must still file a proper annual return after December 31st, which will reconcile your full-year income, apply the tax you paid with Form 1040-C as a credit, and determine whether you get a refund or owe additional tax. Thinking 1040-C completes your tax obligation can result in penalties for failure to file.
Confusion About Joint Filing and Spousal Information
Joint return eligibility causes confusion. Nonresident aliens cannot file jointly under any circumstances. Resident aliens can file jointly on Form 1040-C only if both spouses reasonably expect to qualify for joint filing at year-end and both tax periods terminate simultaneously. If you file jointly, both spouses must provide all required information in Part I, which might mean completing separate Part I sections for each spouse.
Incomplete Documentation and Missing Treaty Statements
Documentation mistakes are common—arriving at the IRS office without proper records to verify income, deductions, or prior tax payments. Create a checklist from the instructions and gather everything before your appointment. Missing documents can prevent issuance of your certificate or require a follow-up visit. Also, many nonresident aliens forget to attach the required statement explaining treaty benefits when claiming reduced tax rates, which can delay processing.
What Happens After You File
Assuming you've filed completely and accurately, paid any required taxes, and satisfied all prior-year filing obligations, the IRS Field Assistance Area Director (or their agent) will sign the certificate of compliance section on page 2 of your Form 1040-C. This signature converts your copy into an official sailing permit. Keep this document with you when departing—while it's rarely checked at airports nowadays, immigration or customs officials can request it.
The certificate is effective for the specific departure for which it's issued, or if you've satisfied certain conditions showing you'll return, it may cover all departures during the current tax year. However, the IRS can revoke it for any later departure if they believe your leaving would jeopardize tax collection. The certificate is not a final determination of your tax liability—it's based on information available at the time of issuance. If the IRS later discovers you owed more tax, you'll still be liable for the additional amount plus potential interest and penalties.
Any tax you paid with Form 1040-C is treated as a payment toward your total tax for the year. This amount appears as a credit on line 28 (or another payments line) when you file your final annual return. If Form 1040-C showed an overpayment, don't expect an immediate refund—you'll only receive money back if your final annual return also shows an overpayment after accounting for your full year's income and the Form 1040-C payment.
After the tax year ends, you must file the appropriate final return. If you were a U.S. resident on December 31st, file Form 1040 reporting worldwide income. If you were a nonresident on the last day of the year, file Form 1040NR or 1040NR-EZ. Some departing aliens will have dual-status tax years, being residents for part of the year and nonresident for the rest, requiring special dual-status return treatment. Your final return should reference your Form 1040-C payment and reconcile any differences between your estimated departure-date tax liability and your actual annual tax obligation.
FAQs
Can I file Form 1040-C by mail or electronically instead of visiting an IRS office in person?
No, you cannot mail Form 1040-C or file it electronically. The form requires an in-person appointment at an IRS office where an agent will review your documentation and, if everything is in order, issue your certificate of compliance on the spot. This face-to-face process allows the IRS to verify your identity, examine original documents, and address any questions immediately. Some IRS offices handle walk-ins, but many require scheduled appointments, so call ahead to avoid wasting a trip.
I'm a student on an F-1 visa working part-time on campus. Do I need Form 1040-C before going home for the summer?
Probably not, but it depends on your specific circumstances. Students with F-1 or F-2 visas are generally exempt from the Form 1040-C requirement if their only U.S. income comes from authorized on-campus employment, scholarship or fellowship grants, or interest on bank deposits not connected to a U.S. business. However, if you earned income from unauthorized employment or from sources outside these categories, you would need to file Form 1040-C. When in doubt, review the exceptions list in the instructions or consult with your school's international student office.
My spouse is a U.S. citizen but I'm a resident alien with a green card. Do I need Form 1040-C if I'm leaving temporarily for a family emergency?
Generally, if you hold a green card (are a lawful permanent resident) and plan to return, you should still obtain Form 1040-C before departing unless the IRS is satisfied that your departure doesn't jeopardize tax collection. In practice, green card holders with clean tax records who are clearly returning to the U.S. may be issued a certificate without paying tax upfront, but you still need to file the form and get the certificate. Both you and the IRS need to agree that collection isn't at risk. Bring evidence of your intent to return, such as employment verification, property ownership, or family ties.
What happens if I leave the United States without filing Form 1040-C when I was required to file it?
Leaving without a required certificate of compliance can lead to several consequences. You may face difficulties reentering the United States because the lack of certificate suggests unresolved tax obligations. The IRS can assess taxes and penalties, and your tax debt becomes much harder to resolve from abroad. Interest accrues on unpaid taxes from the original due date. Additionally, willfully failing to obtain a required certificate could potentially be considered tax evasion in extreme cases. If you've already left without filing, consult a tax professional about the best way to resolve your situation, which typically involves filing all required returns and paying owed taxes as soon as possible.
I filed Form 1040-C and paid $5,000 in tax before leaving in June 2017. When I file my Form 1040NR for the full year, it shows I only owe $4,200 total. Will I get a refund?
Yes, you'll receive a refund of $800 when you file your Form 1040NR for the full 2017 tax year. The $5,000 you paid with Form 1040-C is credited against your total tax liability for the year. If your final return calculates total tax of $4,200 and you've already paid $5,000, you've overpaid by $800. Report the $5,000 Form 1040-C payment on the appropriate line of Form 1040NR, and the IRS will refund the $800 overpayment. This is precisely why Form 1040-C isn't your final return—it's an estimated payment that gets reconciled when you file your year-end return.
Do I need to file Form 1040-C every time I leave the U.S., or does one certificate cover multiple trips?
It depends on which type of certificate you receive. If the IRS determines that your departure doesn't jeopardize tax collection—typically because you have a clear intent and ability to return—your certificate of compliance may be valid for all departures during the current tax year. In this case, one Form 1040-C filing covers multiple trips. However, the IRS can revoke this multi-trip certificate if circumstances change. If your departure does jeopardize collection and you're required to pay your estimated tax liability or post a bond, the certificate is only valid for that specific departure, and you'd need to file a new Form 1040-C for any subsequent departures that year.
I'm entitled to lower tax rates under a tax treaty between my country and the United States. How do I claim this on Form 1040-C?
To claim treaty benefits on Form 1040-C, you must attach a detailed statement to your return explaining the specific treaty article that applies to your situation and showing how you calculated the reduced tax. For example, if a treaty reduces the 30 percent withholding rate on dividends to 15 percent, your statement should identify the treaty, cite the specific article number, and show the calculation applying the 15 percent rate. On line 24 of Form 1040-C (where you calculate tax on non-effectively-connected income), enter your computed tax based on the treaty rate rather than the default 30 percent. You may also need to file Form 8833 with your final annual return to disclose your treaty-based position if it reduces your tax. Bring documentation proving your residence in the treaty country to your IRS appointment.
Sources: All information in this summary comes from official IRS publications: 2017 Form 1040-C, 2017 Instructions for Form 1040-C, and the IRS Departing Alien Clearance page.
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