What is Form 8840?
Form 8840, officially the Closer Connection Exception Statement for Aliens, is a legal document that non-U.S. nationals should complete and file annually with the Internal Revenue Service to avoid U.S. taxation. Foreign residents who stay in the U.S. are subject to paying U.S. income tax if they exceed 183 days or more in the U.S. in any one year.
You may use the Form 8840 if you exceeded the “substantial presence test”, but are not going to be filing a U.S. income tax return due to the fact that you maintain “a closer connection” to a foreign country where you will be paying annual income tax.
- Your “closer connection” with countries other than the U.S. will be considered based on the location of:
- Your permanent home (does not matter whether it is a house, an apartment or furnished room; rented or owned)
- Your family
- Your personal belongings, such as cars, furniture, clothing, and jewelry.
- Your current social, political, cultural, or religious affiliations.
- Your business activities (other than those that constitute your tax home).
- The jurisdiction in which you hold a driver’s license.
- The jurisdiction in which you vote.
If you are a green card holder which means you are a lawful permanent resident of the United or have applied for, or taken steps to apply for, a green card, then you are not eligible to fill out this form.
In case your presence in the United States is about a medical condition or far from a foreign government-related issue, you must file Form 8843.
How to fill out Form 8840?
Filling out the Form 8840 is simple and only demands that you pay close attention to detail. In any case, you should not have trouble using it, as it has clear instructions on how to input all the required information. It includes four parts with an additional section of references as per the U.S. Internal Revenue Code.
Provide your full legal name as it is on your citizenship document.
Indicate the beginning and ending date of the tax year
Taxpayer identification number
Indicate your TIN only if you have one.
In case you are filing the form alone, you'll be required to enter your physical addresses in your residence country and the U.S. simultaneously.
Enter your Visa Type and the data you entered the United States. If you do not have a visa, enter your immigration status on the last day of the tax year and the date you entered the United States.
Provide the country or countries that you are a citizen of during the tax year.
Provide the country or countries with which you were issued a passport.
Input your passport number(s).
Provide the number of days you were present in the last three years.
If you checked the “Yes” box here, then you are not eligible for the closer connection exception. However, you may qualify for nonresident status by reason of a treaty. See Pub. 519 for details. If so, you will file Form 8833 with your Form 1040-NR or Form 1040-NR-EZ.
Depending on your close connections, you'll fill out either part 2 or 3 and then proceed to part 4.
If you had a tax home in the United States at any time during the year, do not file Form 8840.
Your tax home is the area of your main place of business or employment regardless of where you maintain your family home. If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live.
Closer connection to a foreign country.
Provide the location of your tax home.
Provide the country to which you have a closer connection.
Closer connection to two foreign countries
Provide the location of your tax home on January 1, 2019.
Provide the location of the tax home you relocated in for the remainder of the year.
Lines 11- 13
Mark the appropriate box for your answer. If you checked No, then you have to attach an explanation.
Significant Contacts With Foreign Country/Countries
Provide the location of your permanent home.
A “permanent home” is a unit (whether owned or rented, and whether a house, an apartment, or a furnished room) that is available at all times, continuously and not solely for short stays.
Provide the location of another permanent home, if it applies.
Provide the location of your family.
Provide the location of your automobile(s).
Provide the area where your automobile(s) is registered.
Provide the location of your belongings.
Provide the location of the banks where you do your routine transactions.
If you markedYes, then provide the location of where you conducted business other than your tax home.
Provide the location where your driver’s license was issued.
Provide the location where your second driver’s license was issued, if it applies.
Provide the location where you are registered to vote.
Provide the country of residence that you list when filling out documents and forms.
Provide the country/ countries where you keep your personal, financial, and legal documents.
Provide the country/ countries where you obtain the majority of your 2019 income.
Provide the type of income source you have from U.S., if it applies.
For stocks and bonds, indicate the country of origin of the stock company or debtor.
Simply mail Form 8840 to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215 by the due date.
You have to avoid the late filing penalty since you will not be allowed to claim a close connection to a foreign country.
This form should be completed and filed each year with the U.S. Internal Revenue Service for it is an acknowledgment that you are entering the U.S. each year only as a “temporary visitor for pleasure”.
A photocopy of each year’s completed form should also be carried, when crossing the border into the U.S. the following year, to indicate that you are entering the U.S. as a temporary visitor from your country of residence.