Termination of US Tax Residency - Covid

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Termination of US Tax Residency - Covid

Post by melindagouvion » Tue Aug 18, 2020 1:52 pm

I am a citizen of a third country.
1. I had been working in the US for a few years, and filed with the IRS as a resident alien before moving back to Canada as a permanent resident at the end of October, 2019.
2. At the time of my moving, I expected that I would be traveling back to the US from time to time and over 31 days in total in 2020 and thereby retaining my US tax residency for 2020 under the Substantial Presence Test. I did not file a Statement to Establish Residency Termination Date while filing my 2019 1040 in April 2020.
3. I received the Covid benefit payment from the IRS in mid-April along with my other tax refunds.
4. It looks increasingly likely that the US-Canada border will remain closed for the remainder of the year. I don't think I'll be physically in the US for over 31 days this year.

I believe I need to file a statement to terminate my US tax residency with the IRS at some point. When should be my termination date? The most intuitive answer is probably the date when I moved back to Canada in October 2019 or the end of the tax year 12/31/2019, but would that "retroactive termination" jeopardize my Covid benefit received from the IRS? Am I able to pick another date, say August 1, 2020, when it became more likely than not that I won't be able to meet the Substantial Presence Test for 2020?

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Re: Termination of US Tax Residency - Covid

Post by nelsona » Wed Aug 19, 2020 7:22 pm

You do not need to be resident of US to get the stimulus. You filed a 1040 for 2019, so by doing so, this implied that you were not going to use an termination date earlier than Dec 31. That thus became your date of non-residency (which has nothing to do with your Cdn residency starting date.

You could file a statement, using 1040-X to amend your 2019 return, withut any problems.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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