IRS Instruction 1040-C – If you’re a nonresident or resident alien planning to leave the United States (or its territories) permanently or for an extended period, you must generally obtain a sailing permit (also called a certificate of compliance) before departure. The IRS uses Form 1040-C (U.S. Departing Alien Income Tax Return) to calculate and pay your estimated U.S. income tax liability for the entire tax year, ensuring taxes on income received or expected are settled.
Form 1040-C (Rev. January 2024) applies to tax year 2025. It is not your final income tax return—you must file a regular Form 1040, 1040-SR, or 1040-NR after year-end.
Download the official instructions (PDF): Instructions for Form 1040-C (Rev. January 2025)
Download the form: Form 1040-C (Rev. January 2024)
Who Must File Form 1040-C?
Aliens (resident or nonresident) intending to depart the U.S. or its territories must file Form 1040-C before leaving, unless they qualify for an exception. This includes:
- Nonresident aliens with U.S.-source income.
- Resident aliens leaving permanently.
- Expatriates (former citizens or long-term residents) who may also need Form 8854.
Use these references:
- Resident aliens → Instructions for Form 1040.
- Nonresident aliens → Instructions for Form 1040-NR.
Exceptions: When You Do NOT Need a Sailing Permit?
You skip Form 1040-C (and Form 2063) if you fall into these categories:
- Holders of diplomatic passports or employees of international organizations with only exempt income.
- Students, trainees, or exchange visitors (F-1, J-1, etc.) with limited income (allowances, authorized employment, or certain interest).
- Short-term visitors (B-1/B-2 visas ≤90 days) with no significant taxable income that would jeopardize collection.
When and Where to File: Get Your Sailing Permit?
File at least 2 weeks before departure (but no more than 30 days prior) at an IRS Taxpayer Assistance Center (TAC).
Call 844-545-5640 to schedule an appointment.
Bring these documents:
- Valid passport + visa/alien registration card.
- Copies of prior 2 years’ tax returns.
- Proof of income, withholding, deductions, dependents.
- Airline ticket or departure proof.
Tax paid on Form 1040-C credits your final return. Overpayments are not refunded until you file your final return.
(Above: Example of Form 2063 and the Annual Certificate of Compliance / Sailing Permit; Sailing Permit compliance checklist)
Structure of Form 1040-C
Part I → Explanation of Status (Group I: Resident; Group II: Nonresident with effectively connected income; Group III: Nonresident with fixed/determinable income).
Part II → Dependents.
Part III → Tax computation (different rules per group).
Schedules:
- Schedule A — Income (columns for resident vs. nonresident types).
- Schedule B — Certain gains/losses (non-effectively connected).
- Schedule C — Itemized deductions.
- Schedule D — Tax computation worksheets.
Key 2025 Updates & Figures
- Standard deduction (Group I residents, not itemizing): $15,000 (single/HoH/MFS); $30,000 (MFJ/QSS). Additional $1,600–$6,400 for age/blindness.
- AMT exemption: $88,100 (single), $137,000 (joint), $68,500 (MFS).
- Social Security wage base: $176,100.
- Digital assets question on Form 1040-C (Line 13).
How to Complete Key Sections?
Income (Schedule A): Report all income received + reasonably expected through Dec. 31 (wages, interest, dividends, business income, gains). Exempt income (treaty, certain bank interest) on Line 5.
Deductions & Adjustments:
- Residents → Standard or itemized (Schedule C) as on Form 1040.
- Nonresidents (Group II) → Business-connected deductions only.
Tax Computation:
- Groups I/II → Use 2025 Tax Rate Schedules + AMT.
- Group III → Generally 30% flat rate (or lower treaty rate).
Payments:
- Withholding, estimated taxes, prior-year credits.
- Pay any balance due in certified funds at TAC.
Important Warnings & Next Steps
- Form 1040-C is not final — file your year-end return (1040/1040-NR) by April 15, 2026 (or later with extension).
- Dual-status aliens → Special rules apply.
- Penalties apply for false information or failure to file final return.
- See Pub. 519 (U.S. Tax Guide for Aliens) for full details.
Official IRS Resources:
If you’re an alien departing the U.S. in 2025–2026, download the instructions today and schedule your TAC appointment early. Proper filing of Form 1040-C protects your ability to leave legally while settling U.S. tax obligations. For personalized advice, consult a tax professional or enrolled agent familiar with international taxation.