1999 Department of the Treasury Internal Revenue Service Instructions for Form 1040-C U.S. Departing Alien Income Tax Return Section references are to the Internal Revenue Code. General Instructions Changes To Note For details on these and other changes that may affect your 1999 Federal income tax, see Pub. 553, Highlights of 1998 Tax Changes, or What's Hot at www.irs.ustreas.gov. Earned income credit.   If you expect your 1999 investment income to be more than $2,350, you cannot claim this credit. Child tax credits.   For 1999, the total of the child tax credit and the additional child tax credit can be as much as $500 for each qualifying child. Student loan interest deduction.   The amount you may be able to deduct on your tax return for interest that is paid during 1999 on a qualified student loan has been increased to $1,500. IRA deduction restored for some people covered by retirement plans. You may be able to take an IRA deduction for 1999 if you are covered by a retirement plan and your modified adjusted gross income is less than: $41,000 if single, head of household, or married filing separately and you lived apart from your spouse for all of 1999; $61,000 if married filing jointly or qualifying widow(er). Section 179 expense deduction.   For 1999, the deduction to expense certain property under section 179 generally has been increased to $19,000. Self-employed health insurance deduction.   For 1999, you may be able to deduct up to 60% of your health insurance. Purpose of Form Form 1040-C is used by aliens who intend to leave the United States during the tax year to: l  Report income received or expected to be received for the entire tax year, and l  If required, to pay the expected tax liability on that income. Form 1040-C must be filed before an alien leaves the United States.   For more information, see How To Obtain the Certificate on page 2. If you are a nonresident alien, use the 1998 Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return, to help you complete Form 1040-C. If you are a resident alien, the 1998 Instructions for Form 1040, U.S. Individual Income Tax Return, will help you complete Form 1040-C. You can get tax forms, instructions, and publications from the Internal Revenue Service (IRS). If you have a foreign address, send your order to the Eastern Area Distribution Center, P.O. Box 85627, Richmond, VA 23285-5627, U.S.A. Please specify the form(s) or publication(s) you want to receive. You can also download forms and publications from the IRS Internet web site at www.irs.ustreas.gov. Alien status rules.   If you are not a citizen of the United States, specific rules apply to determine if you are a resident alien or nonresident alien. Intent is not important in determining your residency status. You are considered a resident alien if you meet either the green card test or the substantial presence test. However, even though you may otherwise meet the substantial presence test, you will not be considered a U.S. resident if you qualify for the closer connection to a foreign country exception or you are able to qualify as a nonresident alien by reason of a tax treaty. These tests and the exception are discussed in the instructions for Part I on page 3. Additional information.   For more information on taxation of resident and nonresident aliens, residency tests, and other special rules, get: l  Pub. 519, U.S. Tax Guide for Aliens. l  Pub. 901, U.S. Tax Treaties. In the United States, you can get tax forms, instructions, and publications from the IRS by calling 1-800-829-3676. Treaty Benefits If you take the position that a treaty of the United States overrides or modifies any provision of the Internal Revenue Code and that position reduces (or potentially reduces) your tax, you must file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), with your final U.S. income tax return. See Pub. 519 for more information. Final Return Required A Form 1040-C is not a final return. You must file a final income tax return after your tax year ends. If you are a U.S. citizen or resident alien on the last day of the year, you should file Form 1040, reporting your worldwide income. If you are not a U.S. citizen or resident alien on the last day of the year, you should generally file Form 1040NR or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, whichever applies.   However, certain individuals who were resident aliens at the beginning of the tax year but nonresident aliens at the end of the tax year must file a “dual-status” return. See Dual-status tax year on page 3. Any tax you pay with Form 1040-C counts as a credit against tax on your final return. Any overpayment shown on Form 1040-C will be refunded only if and to the extent your final return for the tax year shows an overpayment. Certificate of Compliance Note:   The issuance of a certificate of compliance is not a final determination of your tax liability. If it is later determined that you owe more tax, you will have to pay the additional tax due. Form 1040-C or Form 2063.   If you are an alien, you should not leave the United States or any of its possessions without getting a certificate of compliance from your IRS District Director on Form 1040-C or Form 2063, U.S. Departing Alien Income Tax Statement, unless you meet one of the Exceptions below. You may file the shorter Form 2063 if you have filed all U.S. income tax returns you were required to file, you paid any tax due, and either 1 or 2 below applies to you. 1. You have no taxable income for the year of departure and for the preceding year (if the time for filing the earlier year's return has not passed). 2. You are a resident alien with taxable income for the preceding year or for the year of departure, but the District Director has decided that your leaving will not hinder collecting the tax. Exceptions.   You do not need a certificate of compliance if: 1. You are a representative of a foreign government who holds a diplomatic passport; a member of the representative's household; a servant who accompanies the representative; an employee of an international organization or foreign government whose pay is Cat. No. 11311Q