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I you have a U.S. green card, you are a law u l permanent
resident o the U.S. even i you li ve abroad. This
means you are treated as a U.S. resident or U.S. income tax
purposes and you are sub ject to U.S. tax on
your wor ldw i de income rom whatever source derived. Accord i
ng l y, you must f l e a U.S. tax return un l ess
(a) there has been a fnal administrative or judicial
determination that your law ul permanent resident statushas been
revoked or abandoned,(b) your gross income rom worldwide sources is
less than the amounts
that require a tax return to be f l ed, or (c) your U.S.
residence status is a ected by an income tax treaty.
What i my green card has been taken by or g iven tosomeone in
the U.S. government?
I youve surrendered your green card, this doesntnecessarily mean
that your status as a law ul permanentresident has changed. Your
status will not change unlessand unt il you get an o c ial not ice
rom the U.S. Citizenshipand Immigration Service (USCIS ) that there
has been a
nal administrative or judicial determination that yourgreen card
has been revoked or abandoned. You cancontact the USCIS to check
the status o your card.
What i I have been absent rom the U.S. or a long periodo
time?
Your tax responsibilities as a green card holder do notchange i
you are absent rom the U.S. or any periodo time. Your income tax
ling requirement and possibleobligation to pay U.S. taxes continue
until you eithersurrender your green card or there has been a nal
administrative or judicial determination that your green card
has
been revoked or abandoned. There ore, even i the U.S.Citizenship
and Immigration Service (USCIS) no longerrecognizes the validity o
your green card because youhave been absent rom the United States
or a certainperiod o time or the green card is more than ten
yearsold, you must continue to le tax returns until there hasbeen a
nal determination that is not subject to appealthat your green card
has been revoked or abandoned.
What i I havent f l ed pr i or U.S. Income Tax Returns?
I you have not led a U.S. income tax return or oneor more years
and there is no tax liability or any o thoseyears, you should le
returns or the current year and twoprior years. However, i you have
not led a U.S. incometax return or one or more years and income tax
is due or
any o those years, you should le returns or the currentyear and
ve previous years.
What i I have income taxes w i thhe l d rom income Irece ived
rom the U.S.?
When an entity in the U.S. makes a non-wage payment(like social
security or pension payments) to a nonresident
alien, it is required to withhold 30% o the payment (only85% o a
social security payment is subject to the 30%tax) and orward it to
the I RS. When an entity in the U.S.sends a payment to a green card
holder who lives outsidethe U.S., it generally should not withhold
the 30% tax. Ithis tax is withheld in error because you have a
oreignaddress, you should noti y the payer o the income witha Form
W-9 to stop the withholding and you can claim are und o the tax
withheld in error.
What i Im living in another country? Do I have to paytaxes to
both the U.S. and the country where I am livi ng?
A green card holder is considered to be a resident othe U.S. or
U.S. income tax purposes and is there oresubject to U.S. taxes on
worldwide income. I there is noincome tax treaty between your
country o residence andthe U.S., you must pay taxes to both
countries. Yougenerally will get a tax credit against either your
U.S.taxes or your oreign income taxes, depending on yourparticular
circumstances, so you will not be subject todouble taxation.
I the country where you are living has an income taxtreaty with
the U.S., the treaty may contain so-calledtie-breaker rules to
determine which country will be
treated as the country o your residence or income taxpurposes.
Usually, the location o the individuals permanent home or the
center o the individuals vital interestsdetermines resident status.
I you are a resident o the
treaty country under the tie-breaker rule and you elect toapply
the treaty, you will be considered to be a resident othe treaty
country or U.S. income tax purposes and willnot be required to le a
Form 1040 . To make this election,you must le a U.S. Nonresident
Alien Income Tax Return( Form 1040NR ) in the year o the election
and attach a copyo Form 8833 (Treaty-Based Return Position
Disclosureunder Section 6114 or 7701(b)). Green card holders
whoreside in a country that has an income tax treaty with theU.S.
should contact an income tax pro essional or ano ce o the Internal
Revenue Service or assistance.
What i I surrender my green card?
Generally, i you surrender your green card duringthe taxable
year, your tax status as a resident alien willterminate on the last
day o that calendar year. However,i you can establish that, or the
remainder o the calendaryear, your tax home is in a oreign country
or you maintaina closer connection to that oreign country than to
theUnited States, your residency termination date will be thedate
you surrender your green card.
I you are a resident o the United States because youmeet both
the substantial presence test or the taxableyear and have a green
card during the taxable year, yourresidency termination date will
be the later o the dateyou surrender your green card or the last
day you arephysically present in the United States, provided you
canestablish one o the exceptions above. See Pub 519 (U.S.Tax Guide
or Aliens) and the instructions to Form 8840(Closer Connection
Exception Statement or Aliens) oradditional in ormation.
I you are a nonresident alien as o the last day o theyear and a
resident alien or a portion o the year, you
should le a Form 1040NR even i you have no U.S.source income and
attach a copy o Form 1040 thatrefects your income or the period o
the year that youwere a resident alien.
What i I am a long-term resident when I surrender mygreen
card?
I you are a long-term resident o the United States,de ned as an
individual who is a U.S. law ul permanentresident in at least 8 o
the prior 15 taxable years prior tothe termination o permanent
resident status, there arespecial rules to comply with. Your
residency terminationdate will not occur until you le a completed
Form 8854with the IRS and noti y the Department o HomelandSecurity
o your termination o residency, notwithstanding
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that or the remainder o the taxable year your tax home isin a
oreign country or you have a closer connection to a
oreign country. Until you fle Form 8854 with the IRS andnoti y
the Department o Homeland Security o your termination o residency,
your termination o your permanentresident status or immigration
purposes will not relieveyou o your obligation to fle U.S. tax
returns and reportyour worldwide income as a resident o the United
States.For purposes o U.S. tax rules, the date o your terminationo
residency will be the later o the date you noti y theDepartment o
Homeland Security or the date Form 8854is fled with the IRS in
accordance with the instructions orthe orm.
How do I give notice to the Department O HomelandSecurity that I
terminated my residency status?
You will be considered to have given notice o a termination o
residency to the Secretary o Homeland Securityas o the date that
you complete Form I-407 (Abandonmento Law ul Permanent Resident
Status) be ore a diplomaticor consular o fcer o the United States
or at a Port oEntry o the United States be ore a U.S. immigration o
fcial.
What i I have had my green card or less than 8 yearsout o the
last 15 taxable years at the time I revoke orabandon my green
card?
You do not need to fle a Form 8854 or any reason.
I I am a long-term resident, must I fle Form 8854 orthe next 10
years a ter I surrender my green card?
You must fle a Form 8854 or each o the 10 tax yearsa ter the
date o your abandonment o your long-termresident status only i
:
(a) your average annual net income tax liability or the5 years
ending be ore the date o your termination oresidency is more than a
set amount ($124,000 or 2004,$127,000 or 2005, $131,000 or
2006),
(b) your net worth is $2 million or more on the date oyour
termination o residency, or
(c) you ail to certi y on Form 8854 that you have complied with
all o your U.S. ederal tax obligations or the 5years preceding the
date o your termination o residency.
Failure to fle a required Form 8854 in any o the 10 taxyears a
ter the date o your termination o residency may
result in a $10,000 penalty or each year that the orm isrequired
but not fled.
Where do I get Form 8854?
The orm is accessible on the internet
at:http://www.irs.gov/formspubs/index.html .
Taxat ion under sect ion 877.
I you are subject to section 877, you will besubject to an
alternative tax regime with respectto your U.S. source gross
income. For thislimited purpose, special source and taxationrules
apply; you should consider consulting atax advisor as to the
specifc consequences.You genera lly will not be abl e to c laim the
beneftso an income tax treaty to reduce or exemptyour income rom
U.S. taxation becausethe United States reserves the right to
tax
ormer citizens and long term residentsaccording to U.S. law in
almost all o itstreaties. I you are subject to section877 and you
spend more than 30 daysduring any calendar year in the UnitedStates
within the ten years o llowing
your term inat ion o res idency, youmay be treated as a resident
o theUnited States or tax purposes or thatentire calendar year.
IRSDepartment of the TreasuryInternal Revenue Service
w w w . i r s . g o v
Pub licat ion 4588 (2-2007)Catalog Number 49690S
http://www.irs.gov/formspubs/index.htmlhttp://www.irs.gov/formspubs/index.html
