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I will need to file year 2018 with the IRS as a dual status return, because I decided I will give back my green card (probably some day late April, or in May). I have had a new job in a foreign country since January and have been residing in that foreign country since the beginning of 2018, except for some 30 days in february/march when I was back in the USA. I do not plan to go back to the USA for the rest of the year.

On my resident part income statement (I plan on using for 1040 like suggested by the instructions) can I use the foreign earned income exclusion to reduce my tax liability?

If I would not give back my GC, I could file 2018 as a full year US resident and still exclude much of my income using the foreign earned exclusion, but this is dependent on the fact that I can use the physical presence test since I will be out of the USA at least 330 days in a period of 12 months. However, does this still apply if part of those 12 months I'm outside the USA but also not anymore a resident?

Pub 519 is silent about the foreign earned income exclusion for the dual-status case.

CLARIFICATION NOTE: "last year" in the title refers to "dual status return", not to a specific year (2017 or 2016). A "last year dual status return" is a IRS tax return where you are a US person for tax liability for the first part of the year, and a non-US person for the second part of the year.

  • are you asking about the taxes due in 2018 or the taxes due for 2018? – Bishop Apr 11 '18 at 18:02
  • I'm asking for 2018 taxes, that is, the 2018 Tax Return that I will file in 2019. However, I think my question doesn't depend on the specific year. – user180940 Apr 11 '18 at 18:07
  • Would you meet the physical presence test for the previous year? – Bishop Apr 11 '18 at 18:17
  • I have been physically present in the USA from January 2017 to mid-October 2017, so I could decide to start the 12-months period from October 15th, 2017. So no. – user180940 Apr 12 '18 at 14:22

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