Form 1040-C: U.S. Departing Alien Income Tax Return
What Form 1040-C Is For
Form 1040-C is a specialized tax document filed by non-U.S. citizens (aliens) who plan to leave the United States or any of its territories. Think of it as an early tax settlement that you complete before you depart, rather than at the regular tax season. The form serves two main purposes: first, it reports all income you've received or expect to receive for the entire tax year up until your departure date; second, it pays the estimated tax you owe on that income. When you successfully file this form and pay any taxes due, the IRS issues you a "certificate of compliance"—commonly called a sailing permit or departure permit—which proves you've met your U.S. tax obligations. Without this certificate, most aliens cannot legally leave the country. It's important to understand that Form 1040-C is not your final tax return for the year. You'll still need to file a regular annual return (Form 1040 for resident aliens or Form 1040-NR for nonresident aliens) after the tax year ends, at which point any tax you paid with Form 1040-C will count as a credit toward your total tax bill.
The form applies to both resident aliens (those who hold a green card or meet the substantial presence test) and nonresident aliens who have income effectively connected with a U.S. trade or business. However, many categories of aliens are exempt from filing—including diplomats with diplomatic passports, certain students on F-1 or J-1 visas who receive only scholarship income or authorized employment income, short-term business visitors on B-1 visas staying less than 90 days, and Canadian or Mexican residents who commute frequently to the U.S. for work with wages subject to withholding.
When You'd Use Form 1040-C (Late/Amended)
Timing and Appointment Requirements
You must file Form 1040-C at a very specific time: no earlier than 30 days before your planned departure from the United States, but at least two weeks before you actually leave. This timing window is critical—file too early and your certificate won't be issued; file too late and you won't receive your permit in time. The IRS requires an in-person appointment at a Taxpayer Assistance Center to file this form, so you should call 844-545-5640 well in advance to schedule your appointment, as availability can be limited during busy seasons.
Departures Between January 1 and April 15
If you're departing between January 1 and April 15 of the following year, you have an additional requirement: you must also file your annual tax return for the previous year (Form 1040 or Form 1040-NR for 2018 if departing in early 2019) and pay any tax due for that year. For example, someone leaving in February 2019 would need to file both their 2018 annual return and their 2019 Form 1040-C.
“Late” or “Amended” Situations and Multiple Departures
There's no traditional "late" or "amended" filing for Form 1040-C in the usual sense because it's tied to your departure date rather than the April 15 deadline. If you file it and then your plans change, the sailing permit issued remains valid for all departures during that calendar year—unless the IRS believes a later departure would jeopardize tax collection, in which case they may require a new filing. If you previously obtained a sailing permit earlier in the year and are departing again, you may need to report any additional U.S. income tax you paid at your previous departure on line 28 of a new Form 1040-C.
When Form 2063 Can Be Used Instead
Some aliens may qualify to file the simpler Form 2063 instead, which doesn't require a full tax computation. You can use Form 2063 if you've had no taxable income for the current year and preceding year, or if you're a resident alien whose departure won't hinder tax collection (as determined by the IRS Area Director). If you don't qualify for Form 2063, you must file the full Form 1040-C.
Key Rules or Details for 2019
Residency Status and Filing Status Rules
Several essential rules govern Form 1040-C filing. First, understand your residency status: resident aliens include green card holders and anyone meeting the substantial presence test (physically present in the U.S. for at least 31 days during 2019 and 183 days over a three-year period using a weighted formula). Nonresident aliens are everyone else. Your status determines which parts of the form you complete and how your income is taxed.
Nonresident aliens filing Form 1040-C cannot file jointly, even if married. Resident aliens can file jointly only if both spouses reasonably expect to qualify to file a joint return at the normal close of the tax year and their tax years end simultaneously. If filing jointly, both spouses must appear at the IRS office if both are aliens departing together.
Income Reporting Rules
You must report all income received or expected to be received for the entire tax year through your departure date, not just income to date. This means making reasonable estimates of income you'll earn through the day you leave. Resident aliens report worldwide income (similar to U.S. citizens), while nonresident aliens report only U.S.-source income. Nonresident alien income is further divided into income "effectively connected" with a U.S. trade or business (taxed at graduated rates like resident aliens) and income "not effectively connected" (typically taxed at a flat 30% rate, though tax treaties may provide lower rates).
Payment, Prior-Year Returns, and Overpayments
Payment requirements are strict: except when you furnish a bond or the IRS determines your departure won't jeopardize tax collection, you must pay all tax shown on Form 1040-C at filing, plus any taxes due for past years. You must also have filed all required prior-year returns. If your Form 1040-C shows an overpayment, you won't receive a refund when you file—overpayments are only refunded when you file your annual return after the tax year ends.
Effect and Scope of the Certificate of Compliance
The certificate of compliance you receive is not a final determination of your tax liability. If it's later determined you owe more tax, you must pay the additional amount. The certificate typically applies to all departures during the current tax year, but may be limited to a single specific departure if the IRS believes tax collection is at risk.
Step-by-Step (High Level)
Step 1: Determine if you need to file.
Review the exemption categories to see if you qualify to skip the sailing permit requirement. If you're a diplomat, certain student visa holders with limited income types, short-term business visitors, or Canadian/Mexican commuters with withholding, you may be exempt.
Step 2: Schedule your appointment early.
Call 844-545-5640 at least 2-4 weeks before your departure (but no more than 30 days before) to schedule an appointment at your nearest IRS Taxpayer Assistance Center. Services are by appointment only, and availability varies.
Step 3: Gather required documents.
Collect your valid passport with visa or alien registration card, copies of your last two years of U.S. tax returns, receipts for taxes paid, wage statements from all 2019 employers showing income and withholding (or income/expense statements if self-employed), proof of estimated tax payments, documentation of property sales, scholarship/fellowship grant documents, tax treaty documentation if applicable, your travel itinerary or airline ticket, and your Social Security card or ITIN notice. If married in a community property state, bring your spouse's documents too.
Step 4: Complete the form.
Form 1040-C has four main parts. Part I establishes your status as a resident or nonresident alien and includes questions about your visa, occupation, re-entry permits, prior-year returns, and U.S. property holdings. Part II lists your dependents if you have any qualifying children or other dependents. Part III calculates your tax using Schedule A (to report all income sources), Schedule B (for certain capital gains by nonresidents), Schedule C (for itemized deductions), and Schedule D (for tax computation). Resident aliens (Group I) and nonresident aliens with effectively connected income (Group II) figure tax using graduated rates; nonresident aliens with income not effectively connected (Group III) typically pay 30% on that portion.
Step 5: Calculate your tax liability.
Add up all income by type and source, subtract allowed adjustments and deductions, apply the appropriate tax rates, subtract any credits, add other taxes like self-employment tax if applicable, and total your tax liability. Then subtract U.S. withholding, estimated tax payments, and other payments to determine the amount you owe or are overpaid.
Step 6: Attend your IRS appointment.
Bring all documents, the completed Form 1040-C (original plus one copy), and payment for any tax due. The IRS officer will review your form and documents. If everything is in order and you pay any required tax, the officer signs the Certificate of Compliance section at the bottom of page 2.
Step 7: Receive your sailing permit.
The signed copy of Form 1040-C with the completed Certificate of Compliance section becomes your sailing or departure permit. Keep this with your travel documents—you may be asked to present it when leaving the United States.
Step 8: File your final annual return.
After the tax year ends, file your regular Form 1040 or Form 1040-NR by the normal deadline. Report all income for the entire year and claim the tax you paid with Form 1040-C as a credit against your total tax liability. If you overpaid, you'll receive a refund at this time.
Common Mistakes and How to Avoid Them
Waiting until the last minute.
Many aliens don't realize they need a sailing permit until days before departure. Since you need an appointment at least two weeks in advance (and possibly longer during busy periods), last-minute filers risk missing their flights. Solution: If you're an alien planning to leave the U.S., research your sailing permit requirements immediately and schedule your appointment as soon as your travel dates are firm.
Assuming you're exempt when you're not.
The exemption categories have specific requirements. For example, students on F-1 visas are only exempt if they received no U.S. income other than scholarships, authorized employment, or bank interest not connected to a trade or business. Even small amounts of unauthorized income or tips can disqualify you. Solution: Read the exception criteria carefully and when in doubt, file Form 1040-C rather than assuming you're exempt.
Forgetting to report expected income.
Form 1040-C requires reporting income "received or expected to be received" through your departure date. If you've worked through mid-December and are leaving December 20th, you must estimate and report your final paycheck even if you haven't received it yet. Solution: Contact employers to confirm your final pay amounts and dates before completing the form.
Not bringing all required documents.
Missing even one key document (like a prior year tax return or a W-2 from an employer you forgot about) can delay your permit issuance and jeopardize your travel plans. Solution: Use the checklist in the instructions and gather everything at least a week before your appointment, verifying you have complete records.
Confusing Form 1040-C with the annual return.
Some aliens believe filing Form 1040-C completes their tax obligation for the year and don't file a Form 1040 or Form 1040-NR when it's due. Solution: Remember that Form 1040-C is a preliminary return for departure purposes only. Set a reminder to file your actual annual return after the tax year ends, claiming your Form 1040-C payment as a credit.
Incorrectly calculating tax for nonresidents.
Nonresident aliens must separate effectively connected income (business income, employment) from not effectively connected income (certain investment income, prizes) because they're taxed differently. Mixing these categories leads to significant errors. Solution: Review the Form 1040-NR instructions alongside the Form 1040-C instructions to understand which income goes where, or consult a tax professional experienced in nonresident alien taxation.
Filing too early.
The IRS won't issue a certificate more than 30 days before your departure. Filing in August for a December departure means wasted effort—you'll need to file again. Solution: Time your filing and appointment for the 2-4 week window before departure, no earlier.
What Happens After You File
When you attend your IRS appointment with Form 1040-C and all required documents, an IRS officer reviews your submission. If you've filed all previous years' returns, paid all prior taxes due, and pay any tax shown on Form 1040-C (or the IRS determines payment isn't required), the officer signs the Certificate of Compliance section on page 2 of your form. This signature converts your form copy into an official sailing or departure permit.
This permit serves as proof that you've satisfied your U.S. tax obligations according to all information available to the IRS at that date. The certificate states it's effective for the specific tax period and departure date. For most departures where tax collection isn't considered at risk, this permit remains valid for all your departures during the current calendar year. However, if you return to the U.S. and depart again, the IRS may require a new Form 1040-C if they believe your leaving would hinder collecting tax on additional income earned during your return.
You should keep your signed Form 1040-C with your passport and travel documents. While not always checked, immigration or customs officials may request to see your sailing permit when you depart the United States. Failure to produce it when required can result in being prevented from leaving until you obtain one.
After departure, your tax obligations continue. You must still file a final annual income tax return for 2019 after the year ends—either Form 1040 if you were a U.S. resident on the last day of the year, Form 1040-NR if you were a nonresident on the last day, or a "dual-status" return if your status changed during the year. This final return reports your income for the entire year and calculates your actual tax liability for the full year. The tax you paid with Form 1040-C appears as a payment/credit that reduces the amount you owe on the final return. If your Form 1040-C showed an overpayment, you won't receive that refund until you file the annual return. If the final return shows you owe more tax beyond what you paid with Form 1040-C, you must pay the difference.
The issuance of a certificate of compliance is not a final determination of tax liability. If the IRS later determines you owed more tax than you paid, you remain liable for that additional tax plus applicable interest and penalties. The sailing permit simply indicates that based on information available at your departure date, you met your known tax obligations.
FAQs
I'm a student on an F-1 visa with a part-time campus job. Do I need Form 1040-C?
It depends on your income sources. If your only U.S. income comes from your authorized on-campus employment, a fellowship or scholarship covering educational expenses, or bank interest not connected to a business, you're exempt from the sailing permit requirement. However, if you have any other U.S. income—even tips, freelance work, or unauthorized employment—you must file Form 1040-C. When in doubt, bring your income documentation to your IRS appointment; they can help determine if you need to file.
Can I file Form 1040-C by mail or electronically?
No. Form 1040-C must be filed in person at an IRS Taxpayer Assistance Center by appointment only. This in-person requirement allows the IRS officer to review your documents, ask clarifying questions, and issue your sailing permit immediately upon approval. Call 844-545-5640 to schedule your appointment. Because appointments can be limited, especially during tax season, schedule as early as possible within the 30-day window before your departure.
What happens if I don't get a sailing permit and I'm required to have one?
Departing the United States without a required certificate of compliance violates U.S. tax law. While enforcement varies, you could be prevented from leaving at the point of departure by immigration authorities. If you do manage to leave without the required certificate, the IRS may initiate collection proceedings for unpaid taxes, assess penalties, and consider your departure as evidence of intent to avoid tax obligations—potentially leading to a "termination assessment" (an immediate demand for payment of taxes for current and prior years). Future visa applications or attempts to return to the U.S. could also be jeopardized by non-compliance.
I'm leaving on January 8, 2019. Do I need to file for 2018 too?
Yes. If you're departing between January 1 and April 15, 2019, you must file your 2018 annual income tax return (Form 1040 or Form 1040-NR) and pay any tax due for 2018, in addition to filing Form 1040-C for 2019. This ensures you've settled all tax obligations for the completed year before leaving. If you owe tax for 2018, you must pay it at the time you apply for your sailing permit.
My Form 1040-C shows I overpaid. Will I get a refund check at the IRS office?
No. The IRS cannot issue refunds at the time of departure based on Form 1040-C. If your calculation shows an overpayment, you simply won't owe any additional tax when filing Form 1040-C, and you'll receive your sailing permit without payment. To receive your refund, you must file your final annual tax return (Form 1040 or Form 1040-NR) after the tax year ends. On that return, the overpayment from Form 1040-C will contribute to your total refund, which will be processed according to normal IRS refund procedures.
I'm a green card holder planning to leave permanently. Is Form 1040-C enough?
Not necessarily. If you're a lawful permanent resident (green card holder) who has held that status in at least 8 of the previous 15 taxable years and you're surrendering your green card with no plans to return, you may be subject to special expatriation tax rules under Section 877A. In this case, you must file Form 8854 (Initial and Annual Expatriation Statement) with your final income tax return and may owe exit tax on the unrealized gains on your assets as if you sold everything the day before expatriating. You should consult a tax professional familiar with expatriation tax before departing, as these rules are complex and have significant financial consequences.
What documents should I bring to my IRS appointment if I'm self-employed?
Self-employed aliens need to bring a statement of income and expenses from January 1 through your planned departure date. This should include all business receipts, invoices showing income earned, records of business expenses, estimated quarterly tax payment confirmations (Forms 1040-ES), and Schedule C from your prior-year return. Also bring your passport and visa, tax returns for the previous two years, receipts for taxes paid, your Social Security card or ITIN notice, travel itinerary, and any other standard documents. If you have business property you're selling before departure, bring documentation of the sale and any gains or losses.
All information is based on IRS.gov authoritative sources including Form 1040-C instructions, Publication 519 (U.S. Tax Guide for Aliens), and IRS.gov topic pages on alien tax clearance and departing alien procedures.
Form 1040-C
Departing Alien Clearance
Topic 858 - Alien Tax Clearance
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