What Form 1040-C Is For
Form 1040-C is a pre-departure filing the Internal Revenue Service uses to confirm that departing aliens have met their U.S. tax obligations before leaving the United States. It helps the IRS verify taxable income received during the year and the expected tax liability up to the date of departure. After reviewing it and any income tax withholding or estimated tax payments, the IRS issues a certificate of compliance, often referred to as a sailing permit.
When You’d Use Form 1040-C
You should use Form 1040-C if you are a non-U.S. citizen leaving the United States and need the IRS to verify your tax obligations for the current tax year. This applies to both resident aliens and nonresident aliens who received taxable income and are required to report it before leaving the country. You must file it no later than 30 days before your scheduled departure date and at least 14 days before your departure.
You generally need Form 1040-C if you earned U.S.-source income, are paying taxes during the year, or must show that your expected tax liability is covered before travel. Some travelers are exempt, including:
- Diplomats with a diplomatic passport
- Short-term business or pleasure visitors
- Certain students or exchange visitors with only authorized income
- Commuters from Canada or Mexico who already have proper income tax withholding
Form 1040-C does not have late or amended versions, so travelers must file within the required window to receive the departure permit. Learn how the IRS reviews outstanding tax balances and verifies income before issuing a departure permit.
Key Rules or Details for 2017
The 2017 rules for Form 1040-C depend on whether you are treated as a resident alien or a departing nonresident alien under U.S. tax laws. This status affects how you report income received during the year and how the IRS reviews the tax shown on your form before issuing a sailing or departure permit.
Residency Status
Resident aliens meet the green card test or substantial presence test and must report worldwide income, similar to filing Form 1040. Nonresident aliens report only U.S.-source income, including wages, business income, or personal property sold during a business trip or while providing official services for a foreign government.
2017 Deductions and Exemptions
- Personal exemption: $4,050 per person, including dependents claimed
- Standard deductions: $6,350 (single), $12,700 (married filing jointly), $9,350 (head of household)
Additional Rules
Resident aliens use the 2017 income tax brackets. Nonresident aliens may be subject to a 30 percent withholding tax, unless a tax treaty reduces this rate to a lower amount. Form 1040-C covers income through your departure date, including wages from an employer showing salaries paid, business income, and capital assets sold.
Step-by-Step (High Level)
Gather Required Documents
Start by collecting your passport, visa, or alien registration card; airline ticket showing your date of departure; and any documents verifying the income you received during the year. Bring prior income tax returns filed, employer statements showing wages paid, records of business expenses, bank records, and proof of estimated tax payments or income taxes paid.
Schedule Your IRS Appointment
Contact the local IRS office and schedule an appointment within the required filing window. Have your taxpayer identification number or Individual Taxpayer Identification Number (ITIN) ready. If both spouses are departing aliens, the IRS may require you to appear together.
Complete the Form
Fill out Form 1040-C with details about taxable income, capital assets sold, business expenses, income tax withholding, and any special tax treaty benefits that affect tax computation or expected tax liability.
Attend the IRS Visit and File the Form
Bring all documents to the appointment so the Internal Revenue Service can review your tax calculation and confirm tax paid. If everything is complete, the IRS will issue a certificate of compliance, allowing you to obtain a sailing permit or departure permit before leaving the United States. Visit our IRS Power of Attorney page to see how a representative can help manage your Form 1040-C filing and IRS appointment.
Common Mistakes and How to Avoid Them
Many issues with Form 1040-C arise from timing, documentation problems, or misunderstandings about income tax rules. The points below highlight common errors and how to avoid them:
- Filing outside the required window: If you submit the form more than 30 days before your departure date or wait until the last week, it may delay the issuance of your departure permit. Schedule your IRS office appointment as soon as your travel plans are set.
- Assuming Form 1040-C replaces your annual income tax return: You still must file Form 1040 or Form 1040NR for the entire tax year, even after receiving the certificate of compliance.
- Incorrect joint filing: Spouses often try to file jointly even when one spouse is a nonresident alien who cannot file a joint income tax return.
- Missing documents: Bring employer statements showing wages paid, bank records, proof of income taxes paid, and any estimated tax payments. Explore payment plan options if you owe tax during your departure review and need time to resolve your balance.
- Incomplete treaty claims: If you claim special tax treaty benefits, attach a statement explaining the treaty article and calculation to prevent processing delays.
What Happens After You File
Once you file Form 1040-C and the IRS confirms your tax calculation, the agency issues a certificate of compliance. This document allows you to obtain a sailing permit or departure permit before leaving the United States. The certificate may be applied to one trip or all departures for the tax year, depending on your specific situation. Any tax paid with Form 1040-C is later applied to your annual income tax return, where your full-year tax liability is finalized.
FAQs
Can I file Form 1040-C by mail or electronically instead of visiting an IRS office?
No, you must file in person so an IRS agent can review your documents, verify your identity, and issue your certificate of compliance during the appointment.
Do international students with F or J visas need to file Form 1040-C if they had income tax withholding?
Many students do not need the form if their only income comes from authorized work or scholarship funds. Students with other taxable income may be required to file before departing the country.
Does a green card holder need Form 1040-C for a short trip abroad to obtain a sailing permit?
Some green card holders do need to file Form 1040-C; the IRS may still require this form if their departure could impact their ability to pay taxes owed for the year, even if the trip is temporary.
What happens if I leave the country without filing Form 1040-C when an income tax return is required?
You may face penalties, tax assessments, or delays when returning to the United States. The IRS can also pursue unpaid taxes once you leave.
Will I get a refund if I overpaid while paying taxes with Form 1040-C?
Refunds are issued only after you file your full-year income tax return, and the IRS confirms your final tax outcome.
