Filing deadline for expatriates is approaching

We are just a few short days away from a very important date. If you expatriated during 2017, chances are you need to file your tax return and Form 8854 by June 15, 2018. You also need to make full payment of any tax due by that date.

If you need more time to get the tax return ready, you can file for an extension to December 15. However, the payment due date remains June 15, 2018.

Today’s topic will be limited to a description of the filing and payment deadlines for expatriates and how to get an extension to file your tax return.

Nonresident aliens must file by June 15

Your tax return filing status for the year is based on your status as of December 31. For tax year 2017, you look at your status as of December 31, 2017 to determine your filing status.

If you expatriated during 2017, you were a nonresident alien on December 31, 2017. Nonresident aliens must file their tax returns by June 15 in the following tax year.1 Form 8854 gets filed with your tax return. That means you must file your tax return and Form 8854 by June 15, 2018.

Exception: you had wages on which US tax was withheld

Unfortunately, for some expatriates the deadline for filing your tax return has already passed. If you earned US wages that are subject to withholding in the year of your expatriation, you would have had to file your tax return and Form 8854 by April 15.2

This is not an unheard-of situation for expatriates. We have seen it many times, in fact – most often with green card holders who terminate their US employment, return to their home country, and turn in their green cards, all within the same calendar year.

If this is your situation, it is too late to file an extension for your 2017 tax return. You will have to file your return late.

You may face a monetary penalty for filing Form 8854 late, or for any other information returns that should have been filed along with your return, and you may be converted from a non-covered expatriate to a covered expatriate. Today’s topic does not cover those things, but you should be aware that they are possible consequences of filing your expatriation return late. You may want to seek help from a professional if this is your situation.

Extension to December 15 available

A nonresident alien who had no wages subject to US withholding can file for a 6-month extension from June 15.

A timely and properly-filed extension extends the filing deadline for a nonresident alien to December 15, 2018. Just like filers with an April 15 deadline can get an automatic 6-month extension to October 15, filers with a June 15 deadline can get an automatic 6-month extension to December 15:3

An individual who is required to file an individual income tax return will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the individual files an application under this section in accordance with paragraph (b) of this section.

The method for getting the automatic 6-month extension is spelled out in Treasury Regulations Section 1.6081-5(b). In plain English: File Form 4868.

To get the extension, you must file Form 4868 by June 15, 2018 and check the box at the bottom where it says “Check here if you file Form 1040NR or 1040NR-EZ and didn’t receive wages as an employee subject to US tax withholding”. If you do not file Form 4868 on time, then you are not allowed the extension and your tax return will be considered late.

Payment deadline remains June 15 if you file an extension

Now that we know when expatriates have to file their tax returns and how to get an extension, let us look at when their payment of tax is due.

Generally, tax is due on the due date for filing your tax return:4

Except as otherwise provided in this subchapter, when a return of tax is required under this title or regulations, the person required to make such return shall, without assessment or notice and demand from the Secretary, pay such tax to the internal revenue officer with whom the return is filed, and shall pay such tax at the time and place fixed for filing the return (determined without regard to any extension of time for filing the return).

As is common in the Internal Revenue Code, we have to check for exceptions before we can rely on what it says. “Except as otherwise provided in this subchapter” are the words that send us in search of exceptions. “This subchapter” refers to Title 26, Subtitle F, Chapter 62, Subchapter A of the United States Code. (Title 26 of the United States Code is colloquially referred to as the “Internal Revenue Code” and it is where Federal tax law lives). Subchapter A includes Sections 6151 through 6159. We have checked; there is no exception lurking in Sections 6151 through 6159 of the Internal Revenue Code that would apply to our nonresident who expatriated in 2017 and is filing an extension by June 15, 2018.

A nonresident alien who files Form 1040NR must pay any tax due (including exit tax) by June 15. Getting an extension to file your return does not give you an extension of time to pay tax.5

Different payment deadline for nonresidents with income tax withholding from wages

The payment deadline of June 15 is for nonresidents who did not have US income tax withholding from wages.

Those taxpayers with US income tax withholding from wages should have made their payments by April 15, their deadline for filing a return or extension.

Thanks and disclaimers

Thanks for reading, and please keep in mind that you have not received legal advice from the author just because you found an article on a website. Seek professional help if you need it.

  1. IRC §6072(c) 
  2. Regs. §1.6072-1(c) 
  3. Regs. §1.6081-4(a) 
  4. IRC §6151(a) 
  5. IRC §6151(a); Regs. §1.6151-1(a)