For green card holders and visa holders moving away from the US
Leaving the US as a Noncitizen: Your Final US Tax Year and the Sailing Permit
Leaving the US ends your US tax residence on a date the IRS rules set, not on the day you decide. Before you go, most noncitizens also need a sailing permit. Here is how both work, from IRS Publication 519, and what changes for anything you keep in the US.
Quick answer
What tax steps does a noncitizen take when leaving the US?
Most noncitizens need a sailing or departure permit before leaving, obtained by filing Form 1040-C or Form 2063 at an IRS Taxpayer Assistance Center at least 2 weeks and not more than 30 days before departure, unless an exception applies. Your US residency ends on December 31 of the last resident year unless you qualify for an earlier residency termination date, and the annual return is still due (IRS Pub 519).
At a glance
- Residency ends
- December 31, or an earlier termination date if you qualify
- Final year
- Often dual-status: resident, then nonresident
- Before you leave
- Sailing permit via Form 1040-C or Form 2063, unless exempt
- Timing
- At least 2 weeks and not more than 30 days before departure
- After you leave
- US-source income and US assets are taxed as a nonresident's
When your US tax residence ends
If you were a US resident in one year and are not a resident at any time in the next, your residency termination date is December 31 of the last resident year, unless you qualify for an earlier date (IRS Pub 519). The earlier date is:
- the last day you were physically present in the US, if you met the substantial presence test;
- the first day you were no longer a lawful permanent resident, if you met the green card test; or
- the later of the two, if you met both tests.
You can use the earlier date only if, for the rest of the year, your tax home was in a foreign country and you had a closer connection to that country. The year you leave is then dual-status: resident up to the termination date, nonresident after it.
The sailing permit
| Point | What IRS Pub 519 says |
|---|---|
| What it is | A certificate of compliance, also called a sailing or departure permit, showing your tax obligations are met |
| Who needs one | All aliens leaving the US, except those in the categories Pub 519 lists as not required to obtain one |
| How to get it | File Form 1040-C or Form 2063 (and any other returns not yet filed) at an IRS Taxpayer Assistance Center, by appointment |
| When | At least 2 weeks before you leave; the certificate cannot be issued more than 30 days before departure |
| Annual return | Form 1040-C is not the annual return; the annual return must still be filed |
Sources: IRS Pub 519, IRS Form 1040-C.
If you are resident in the US and in your new country
If your new country also treats you as resident in the year you leave, the income tax treaty's tie-breaker decides residence for treaty purposes. Each treaty's article is listed on our country pages; claiming it on a US return needs Form 8833 (Form 8833).
Green card holders
Giving up a green card after being a long-term resident can bring the expatriation rules and Form 8854. See Form 8854 and exit tax before you file Form I-407 or otherwise end your status.
What changes for what you keep in the US
- US bank interest, dividends and rent: after the termination date you are a nonresident, taxed on US-source income under the nonresident rules (IRS Pub 519).
- A US LLC you own alone: once you are no longer a US resident, you are a foreign person for Form 5472, so a disregarded LLC you own starts filing Form 5472 with a pro forma Form 1120 (IRS Form 5472 instructions). See Form 5472.
- US real estate: a later sale brings FIRPTA withholding; see FIRPTA.
Treaty and law references
- Residency termination and the dual-status year: Code section 7701(b) (IRS Pub 519).
- Sailing permit: Forms 1040-C and 2063 (IRS Pub 519; IRS Form 1040-C).
- Foreign person for Form 5472: IRS Form 5472 instructions. Treaty residence: Form 8833 and Treas. Reg. section 301.7701(b)-7.
- Your new country's own tax rules apply from your arrival there; check them locally.
How we help
Gurleen Kaur, CPA licensed in British Columbia and Washington State, prepares the departure filings and the final dual-status return, and sets up the nonresident filings for anything you keep in the US. Written quote first. Also see the forms we prepare.
Common questions
Do I need a sailing permit to leave the US?
Most noncitizens do, unless they fall into a category Pub 519 lists as exempt. It is obtained by filing Form 1040-C or Form 2063.
When should I get the sailing permit?
Go to an IRS Taxpayer Assistance Center at least 2 weeks before you leave; the certificate cannot be issued more than 30 days before departure.
Is Form 1040-C my final US tax return?
No. Form 1040-C is not the annual return; you still file the annual return for the year.
When does my US tax residence end?
On December 31 of the last resident year, unless you qualify for an earlier residency termination date with a foreign tax home and closer connection for the rest of the year.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Treaty tie-breakers by country, Form 8854 and exit tax, Form 1040-NR.
Leaving the US? Request a quote
Tell us your situation in a few lines. We confirm whether we can help, what records matter and the next step. Substantive advice begins under a paid diagnostic or signed engagement.
Prepared and signed by a licensed US CPA who can represent you before the IRS. Verify Gurleen Kaur's Washington licence (#41150) on CPAverify