Can I elect to be treated as a resident alien rather than a dual status alien?

[seaTax]

I am a foreign citizen who moved from US to Canada through inter company transfer in September 2022. I was a tax resident in the US since 2020 and pass the substantial presence test for 2022.

According to IRS (chapter 1 of Pub. 519), I will become a nonresident alien when I leave if I meet both of the following conditions:

1. After leaving and for the remainder of the calendar year of my departure, I have a closer connection to a foreign country than to the United States.
2. During the next calendar year, I am not a U.S. resident under either the green card test or the substantial presence test, defined earlier.

I satisfied both conditions since I did establish a closer connection with Canada and I know I won't be returning to the US until late 2023, which means:

• January 2022 to September 2022 - I am a resident alien
• September 2022 to December 2022 - I am a non resident alien

I have US source income from both RA and NRA period so I assume I need to prepare my taxes as a dual status alien for 2022.

My question is: can I elected to be treated as a resident alien to file my taxes, or am I obliged to file my taxes as a dual status alien? And how this decision will affect my next year tax filing as a non resident alien?

[MinhT1]

As you describe, you are a dual status alien for tax year 2022. The IRS does not give you the possibility to consider yourself as a resident alien for the full year.

For the part of the year you are a U.S. resident alien, you are taxed on income from all sources. Income from sources outside the United States is taxable if you receive it while you are a resident alien.

For the part of the year you are a nonresident alien, you are taxed on income from U.S. sources only.

Please read this IRS document for more information on how to submit your tax returns for tax year 2022.

if you are not in the US in 2023, you are a nonresident alien and you only need to file a tax return (form 1040-NR if you have US sourced income.

[seaTax]

Thank you! I reached the same conclusion after reading the IRS website. However, I also came across this post in the TurboTax Community, and the response indicated that filing as RA was a choice. One of the CPAs I consulted made a similar recommendation. So I wonder if this is a rule that can be bent?

[ErnieS0]

The post you cite refers to the “closer connection” rule, meaning you still considered yourself a U.S. resident after moving to Canada because you had a “closer connection” to the U.S.

Generally, if you were a U.S. resident in 2022 but are not a U.S. resident during any part of 2023, you cease to be a U.S. resident on your residency termination date. Your residency termination date is December 31, 2022, unless you qualify for an earlier date.

Earlier residency termination date.

You may qualify for a residency termination date that is earlier than December 31. This date is:

1. The last day in 2022 that you are physically present in the United States, if you met the substantial presence test;
2. The first day in 2022 that you are no longer a lawful permanent resident of the United States, if you met the green card test; or
3. The later of (1) or (2), if you met both tests.

You can use this date only if, for the remainder of 2022, your tax home was in a foreign country and you had a closer connection to that foreign country. See Closer Connection to a Foreign Country.

You can't claim a closer connection to the U.S. if you've applied, or took other steps during the year, to change your status to that of a lawful permanent resident of Canada, or you have an application pending for lawful permanent resident status.