U.S. Income Tax
Who must file a return?
In general, if you are a U.S. citizen or possess a “Green Card” and had income earned anywhere in the world (not just in the United States) that is not otherwise tax-exempt, you must file.
Where can I get tax forms?
All U.S. tax forms and publications are available from the Internal Revenue Services’ Web site, http://www.irs.gov/. Some common tax forms are also available for pick-up at the Embassy in Oslo. If you know the form number, you can also have it faxed to you by calling +1 804 228-3929.
Where can I get assistance?
Tax assistance is available by phone from IRS in the U.S., or from the London office.
The U.S. helpline is staffed between 12.00 and 02.00 Norwegian time:
Phone Number: 001-215-516-2000
The London IRS office:
Phone: 0044-207-894-0477 (Mon - Fri, 09.00 - 12.00)
Fax: 0044-207-495-4224
E-mail: IRS.London@irs.gov
A tax volunteer will be available for limited services at the Embassy from March 9 to June 8, 2009. Please call 2130 8651 and leave a message with your name and telephone number.
The IRS Web site, http://www.irs.gov/, has answers to many questions. To access the list of Frequently Asked Questions (FAQ) for international taxpayers, go to http://www.irs.gov/ and:
Select the “Individuals” link
Select “International Taxpayers”
Scroll to the bottom of the page and select “Help with Tax Questions for International Taxpayers”
Are my Social Security benefits taxable?
That depends on your income.
Your benefits are tax free, if your modified adjusted gross income (AGI), plus one-half of your Social Security benefits is below the base amount of (1) $25,000, if single or (2) $32,000, if married and filing a joint tax return. If you are over the threshold, then the calculation gets more complicated. If your modified adjusted gross income exceeds the threshold, then up to 85% of your Social Security benefits are taxable.
Modified AGI is the sum of your adjusted gross income (excluding Social Security benefits), tax-exempt interest, any amounts of excluded foreign earned income or housing, and any interest excluded from gross income because qualified US Series EE bonds were redeemed to pay qualified education expenses.
Do I have to file if I have (or had) a green card?
If you’ve surrendered your green card, this doesn’t necessarily mean that your status as a lawful permanent resident has changed. Your status will not change unless and until you get an official notice from the U.S. Citizenship and Immigration Service (USCIS) that there has been a final administrative or judicial determination that your green card has been revoked or abandoned. You can contact the USCIS (http://www.uscis.gov/) to check the status of your card.
What if my green card has been returned to the U.S. government?
If you’ve surrendered your green card, this doesn’t necessarily mean that your status as a lawful permanent resident has changed. Your status will not change unless and until you get an official notice from the U.S. Citizenship and Immigration Service (USCIS) that there has been a final administrative or judicial determination that your green card has been revoked or abandoned. You can contact the USCIS(http://www.uscis.gov/) to check the status of your card.
What if I have been absent from the U.S. for a long period of time?
Your tax responsibilities as a green card holder do not change if you are absent from the U.S. for any period of time. Your income tax filing requirement and possible obligation to pay U.S. taxes continue until you either surrender your green card or there has been a final administrative or judicial determination that your green card has been revoked or abandoned. Therefore, even if the U.S. Citizenship and immigration Service (USCIS) no longer recognizes the validity of your green card because you have been absent from the United States for a certain period of time or the green card is more than ten years old, you must continue to file tax returns until there has been a final determination that is not subject to appeal that your green card has been revoked or abandoned.
What if I have not filed a return in previous years?
If you have not filed a U.S. income tax return for one or more years and there is no tax liability for any of those years, you should file returns for the current year and two prior years. However, if you have not filed a U.S. income tax return for one or more years and any income tax is due for any of those years, you should file returns for the current year and five previous years.
What if I have income taxes withheld from income I received in 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% of the payment (only 85% of a social security payment is subject to the 30% tax) and forward it to the IRS. When an entity in the U.S. sends a payment to a green card holder who lives outside the U.S., it generally should not withhold the 30% tax. If this tax is withheld in error because you have a foreign address, you should notify the payer of the income with a Form W-9 to stop the withholding and you can claim a refund of the tax withheld in error.
What if I’m living in another country?
A green card holder is considered to be a resident of the U.S. for U.S. income tax purposes and is therefore subject to U.S. taxes on worldwide income. If there is no income tax treaty between your country of residence and the U.S., you must pay taxes to both countries. You generally will get a tax credit against either your U.S. taxes or your foreign income taxes, depending on your particular circumstances, so you will not be subject to double taxation.
If the country where you are living has an income tax treaty with the U.S., the treaty may contain so called “tie-breaker rules” to determine which country will be treated as the country of your residence for income tax purposes. Usually, the location of the individual’s permanent home or the center of the individual’s vital interests determines resident status. If you are a resident of the treaty country under the tie-breaker rule and you elect to apply the treaty, you will be considered to be a resident of the treaty country for U.S. income tax purposes and will not be required to file a Form 1040. To make this election, you must file a U.S. Nonresident Alien Income Tax Return (Form 1040NR) in the year of the election and attach a copy of Form 8833 (Treaty-Based Return Position Disclosure under Section 6114 or 7701(b)). Green card holders who reside in a country that has an income tax treaty with the U.S. should contact an income tax professional or an office of the Internal Revenue Service for assistance.
Do I have to file if I surrender my green card?
Generally, if you surrender your green card during the taxable year, your tax status as a resident alien will terminate on the last day of that calendar year. However, if you can establish that, for the remainder of the calendar year, your tax home is in a foreign country or you maintain a closer connection to that foreign country than to the United States, your residency termination date will be the date you surrender your green card.
If you are a resident of the United States because you meet both the substantial presence test for the taxable year and have a green card during the taxable year, your residency termination date will be the later of the date you surrender your green card or the last day you are physically present in the United States, provided you can establish one of the exceptions above. See Pub 519 (U.S. Tax Guide for Aliens) and the instructions to Form 8840 (Closer Connection Exception Statement for Aliens) for additional information.
If you are a nonresident alien as of the last day of the year and a resident alien for a portion of the year, you should file a Form 1040NR even if you have no U.S. source income and attach a copy of Form 1040 that reflects your income for the period of the year that you were a resident alien.
What if I am a Long-Term Resident when I surrender my green card?
If you are a long-term resident of the United States, defined as an individual who is a U.S. lawful permanent resident in at least 8 of the prior 15 taxable years prior to the termination of permanent resident status, there are special rules to comply with. Your residency termination date will not occur until you file a completed Form 8854 with the IRS and notify the Department of Homeland Security of your termination of residency, notwithstanding that for the remainder of the taxable year your tax home is in a foreign country or you have a closer connection to a foreign country. Until you file Form 8854 with the IRS and notify the Department of Homeland Security of your termination of residency, your termination of your permanent resident status for immigration purposes will not relieve you of your obligation to file U.S. tax returns and report your worldwide income as a resident of the United States. For purposes of U.S. tax rules, the date of your termination of residency will be the later of the date you notify the Department of Homeland Security or the date Form 8854 is filed with the IRS in accordance with the instructions for the form.
How do I give notice to the Department of Homeland Security that I terminated my residency status?
You will be considered to have given notice of a termination of residency to the Secretary of Homeland Security as of the date that you complete Form I-407 (Abandonment of Lawful Permanent Resident Status) at the Embassy.
What if I have had my green card for less than 8 years out of the last 15 years at the time I revoke or abandon my green card?
You do not need to file a Form 8854 for any reason.
If I am a long-term U. S. resident, must I file Form 8854 for the next 10 years after I surrender my green card?
You must file a Form 8854 for each of the 10 tax years after the date of your abandonment of your long-term resident status only if:
Failure to file a required Form 8854 in any of the 10 tax years after the date of your termination of residency may result in a $10,000 penalty for each year that the form is required but not filed
The unofficial* average exchange rate for 2008 is $1.00 = NOK 5.647 *The IRS has no official exchange rate. Taxpayers have been required to translate foreign income into dollars on the date of payment. A wage earner is allowed to use a yearly average. The IRS accepts any posted exchange rate that is used consistently.
