Dual-Status Return Explained: The Year You Move
How the move year is split, the starting and ending dates, the limits, and the elections that avoid it
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
A dual-status return is the U.S. return for the year a person becomes or stops being a U.S. resident — part nonresident, part resident. Worldwide income is taxed only for the resident period; the nonresident period covers U.S.-source and effectively connected income. A Canadian moving mid-year usually files one unless an election applies.
On this page
The two periods
| Period | Taxed on | Return form |
|---|---|---|
| Resident period | Worldwide income | Form 1040 — the return itself in an arrival year (marked "Dual Status Return"); attached as the "Dual Status Stmt" in a departure year |
| Nonresident period | U.S.-source and effectively connected income only | Form 1040-NR — attached as the "Dual Status Stmt" in an arrival year; the return itself in a departure year |
The dates
The residency starting date is generally the first day of presence in the year the substantial presence test is met (up to 10 days of presence can be disregarded if on those days the person had a closer connection to, and a tax home in, a foreign country — Reg. 301.7701(b)-4(c) — though those days still count toward the test itself) or, under the green card test, the first day present in the United States as a lawful permanent resident. The ending date is December 31 unless the person qualifies for an earlier one — the last day of presence (substantial presence test) or the first day no longer a lawful permanent resident (green card test) — by having a tax home in, and a closer connection to, another country for the rest of the year and not being a U.S. resident at any time the next year.
Limits on a dual-status return
No standard deduction (itemized deductions only), no joint return (unless an election applies), no head of household rates, and a married filer uses the married-filing-separately rates. The education credits and the earned income credit are unavailable unless the couple elects full-year residency, and nonresident-period income not effectively connected with a U.S. business is taxed at a flat 30% (or a lower treaty rate).
The elections that avoid it
| Election | Effect |
|---|---|
| First-year choice (section 7701(b)(4)) | A person who meets neither test this year (and wasn't a resident last year) but meets the substantial presence test next year can elect residency from the start of a 31-consecutive-day period of presence, if present on at least 75% of the days from then to December 31 (up to 5 days of absence count as presence); the statement goes with a return filed after next year's test is met, and the year is still dual-status |
| Nonresident spouse election (section 6013(g) or (h)) | A married couple can elect to be treated as residents for the full year and file jointly — (g) when one spouse is still a nonresident at year-end, (h) when the arriving spouse is a resident by year-end (available only once to the same couple) (the nonresident spouse guide) |
The Canadian side
Canada has its own part-year return for the departure year (the departure tax guide), so the move year usually means a Canadian part-year return and a U.S. dual-status (or elected full-year) return.
Frequently asked questions
What is a dual-status return?
The U.S. return for a year that's part resident and part nonresident — usually the year of a move.
Can I file jointly in the year I move?
Not on a dual-status return, unless you make the election to be treated as residents for the full year.
When does my U.S. residency start?
Usually the first day of presence in the year you meet the substantial presence test, or the first day you're in the United States as a green card holder.
Do I get the standard deduction?
No — dual-status filers must itemize, unless an election converts the year to full residency.
Official sources
The IRS explains: “You have a dual-status tax year when you have been both a resident alien and a nonresident alien in the same year. Dual status does not refer to your citizenship; it refers only to your tax resident status in the United States.” — Internal Revenue Service, Publication 519 (2025), U.S. Tax Guide for Aliens, https://www.irs.gov/publications/p519
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle move-year returns — dual-status and elected full-year U.S. returns alongside Canadian part-year returns. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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