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Renunciation of U.S. Permanent Resident Status and Its Tax Consequences

The decision to relinquish your U.S. permanent residence status does not merely change your legal status; it also has significant tax consequences. Special attention should be paid to U.S. tax obligations after relinquishing permanent residence. This article will discuss U.S. income tax reporting and departure taxes after relinquishing permanent residence in detail.

Income Tax Returns After Relinquishing Permanent Residence

In the year you relinquish your permanent residence, you are required to file an income tax return on your worldwide income inside and outside the U.S. for the period through the date you relinquish. For example, if you relinquish your permanent residence on June 30, 2024, you will be subject to U.S. tax on your income from January 1 through June 30, 2024.

On your first return after abandonment, you will file as a "Dual-Status Taxpayer" using IRS Form 1040. This must be accompanied by a Dual-Status Statement showing that you spent the first half of the year as a permanent resident and the second half as a nonresident.


Exit Tax （ Exit Tax ）

Upon abandonment of permanent residence, those who meet certain conditions are subject to an "exit tax. The exit tax is imposed on unrealized gains on the hypothetical sale of all assets at the time of abandonment. A person is subject to departure tax if one of the following three conditions is met

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