resident or Non-resident Alien?

It depends.  If you were a resident in 2020 (and your circumstances suggested that you were), you have 3 possible statuses depending on your specific facts and circumstances (which could be further complicated if you became a resident because of the "5-year rule" for a student visa).  For 2021 you were either:

• A U.S. resident for tax purposes
• A nonresident for tax purposes
• A dual resident for tax purposes

Here's what could determine the difference:

US resident.  Even though you were not in the US for 183 days in 2021, you are still a resident for tax purposes if one of the two following apply:

• You hold a green card and have not revoked it
• You are a resident via the presence test

The presence test looks back to the previous 3 years.  It counts every day you were present in 2021, plus 33% of the days you were present in 2020, plus 1/6 of the days you were present in 2019.  If the sum of those three numbers equals 183 days or more, you also qualify as a resident for US tax purposes.  (The caveat is that if you were under the 5-year exemption at any point, those days do not count towards the presence test).  Depending on when you left in April and whether or not you've had any prior time in 2019 or 2020 not count as presence due to being exempted, it is possible that you could be a US resident for tax purposes unless you elect to be a dual resident.  If you qualify to be considered a resident for tax purposes, you report all of your worldwide income on US tax form 1040.  This would be the best option if you are either a green card holder, or you are planning to return to the US in 2022 and believe you will fulfill the presence test again.

If in this scenario you must claim income earned outside of the United States, there are options to either receive credit for taxes you must pay to another government on that income or possibly exclude it if you meet the standards for the Foreign Income Exclusion.

US Nonresident.  If you are do not qualify as a US resident for tax purposes, then you are considered to be a US Nonresident.  In this scenario, you would file all of your income on Form 1040NR.  Only income earned while in the United States or from US sources would be included on the return.  Your income from the final settlement would be included, because it was derived from your work while in the United States.  However, instead of treating yourself as a nonresident, you likely would qualify for the following for the following election.

Dual Resident Status.  If you either do not qualify to claim US Resident for tax purposes in 2021 or you could claim that you were a resident because of the presence test, but are confident that you will not meet the presence test next year, then you can claim that you are a dual-resident alien for tax purposes.  With this status (which is an election), you:

• Claim all of your income earned during your residency period (up until April of 2021, including whatever severance bonus your employer provided, on Form 1040 (US resident return). Since the United States requires that a resident claim income from all worldwide income, you will claim all of your worldwide income from January 1 to April xx as US Resident income
• Claim all of your US-sourced income only from after your residency period (if any) as nonresident income on Form 1040 NR.  You only need to include US income from April xx forward (the day after you left the United States).

The above is a simplification of the procedure.  If this is an option for you, you probably want to read more at these two IRS websites:

• Taxation of Dual-Status Aliens | Internal Revenue Service

• Dual Status Individuals | Internal Revenue Service

TurboTax does not support filing Form 1040NR.  If you file either as a Nonresident or as a Dual-Resident with a Nonresident period of income, you can file the 1040NR by visiting our colleagues at Sprintax.