How to Abandon Your Green Card: Step-by-Step Guide for 2026

If you’re living abroad permanently and no longer plan to return to the U.S., you might be wondering whether you should formally abandon your green card. According to IRS data, thousands of green card holders make this decision each year—and here’s the relief: if you’ve held your status for fewer than 8 years, you can walk away without facing the exit tax that concerns many long-term residents.

Abandoning your green card is a permanent decision with both immigration and tax consequences. The process requires filing Form I-407 with USCIS, completing final tax returns, and, if you’re a long-term resident, filing Form 8854. But when done correctly and at the right time, it ends your ongoing U.S. tax obligations and gives you a clean closure with immigration authorities.

This step-by-step guide walks you through the entire process—from deciding whether abandonment makes sense for your situation, to timing it strategically, to completing all required filings. Whether you’re approaching the 8-year mark and want to avoid exit tax, or you’re already a long-term resident preparing for the consequences, you’ll know exactly what to do and in what order.

Make Sure You Abandon Your Green Card the Right Way

You can avoid the common mistakes that keep you on the hook for U.S. tax filing after you move.

Step 1: Determine If You Should Abandon Your Green Card

Before taking any action, carefully evaluate whether abandoning your green card makes sense for your specific situation.

You Should Consider Abandoning If:

You’ve permanently relocated abroad and have no plans to return to live in the U.S. If you’ve built a life in another country—career, family, home ownership—and don’t foresee moving back, maintaining your green card creates ongoing compliance burdens without benefit.
You can’t meet the residency requirements. If you’ve been outside the U.S. for more than one year without a reentry permit, you risk having your status terminated inadvertently by CBP at a port of entry. Proactive abandonment gives you control over timing.
The tax filing burden outweighs the benefits. Green card holders must file U.S. tax returns annually and report worldwide income, even if they owe $0. If you’re not using your green card to live in the U.S., these requirements create paperwork for its own sake.
You’re approaching 8 years and don’t want exit tax exposure. If you’re close to the 8-year mark that triggers long-term resident status, abandoning before you hit that threshold avoids any possibility of exit tax, regardless of your net worth.
You received a green card you never intended to keep. Some people obtain green cards through family sponsorship but never activate or use them. If you’re not complying with filing requirements anyway, formal abandonment protects you from accumulating penalties.

You Should Keep Your Green Card If:

You might return to the U.S. in the future. If there’s any chance you’ll want to live in the U.S. again—for retirement, family reasons, or career opportunities—keeping your status makes sense. Abandonment is permanent; you’d have to apply for a new green card from scratch.
You’re under 8 years, and the filing burden is manageable. If you’re staying compliant with annual tax filings and they’re not creating high cost or complexity, maintaining your status keeps your options open.
You frequently visit the U.S. for business or family. A green card makes U.S. entry straightforward. After abandonment, you’ll need visa authorization for every visit, which adds complexity and cost.
You have children who might benefit from derivative status. If you have minor children who hold or could obtain derivative green cards through you, abandoning your status may affect their immigration options.

Key Question: Are You a Long-Term Resident?

This single factor determines whether abandonment will trigger potential exit tax liability.

You’re a long-term resident if you’ve held your green card for at least 8 out of the last 15 tax years. Here’s what counts:

Any part of a calendar year counts as a full year (even if you got your card on December 31)
Years where you filed Form 8833 claiming treaty benefits as a non-resident don’t count
The IRS looks back 15 years from your abandonment date

Example: You received your green card in March 2019. If you abandon in early 2026, you’ll have held it during parts of 8 calendar years (2019-2026), making you a long-term resident subject to potential exit tax.

If you abandon before 2026 begins, you’ll have only 7 years (2019-2025) to avoid long-term resident status entirely.

Step 2: Get Your Tax Compliance in Order First

This is critical: If you’re a long-term resident, one of the three tests for becoming a “covered expatriate” (subject to exit tax) is whether you can certify 5 years of full U.S. tax compliance. If you can’t certify compliance, you automatically become covered—even if your net worth is below $2 million USD.

Check Your Filing History

Review whether you’ve filed all required returns for the past 5 years:

Tax returns: Did you file Form 1040 every year reporting worldwide income?
FBAR: If your foreign accounts exceeded $10,000 at any point, did you file FBAR by the deadline?
Form 8938: If you met the FATCA thresholds, did you file this with your tax return?
Other forms: Did you file Form 5471 for foreign corporations, Form 8621 for PFICs, or any other required information returns?

Catch Up If You’re Behind

If you’re missing any required filings, use Streamlined Filing Procedures to get compliant before abandoning your green card.

The Streamlined Program allows you to:

File the last 3 years of tax returns
File 6 years of FBARs
Pay any taxes owed (though most expats owe $0 after applying the Foreign Earned Income Exclusion or Foreign Tax Credit)
Avoid or minimize penalties if your failure to file was non-willful

Once you’re compliant, you can file Form I-407 and truthfully certify compliance on Form 8854, potentially avoiding covered expatriate status entirely.

Step 3: Calculate Your Potential Exit Tax Exposure (Long-Term Residents Only)

If you’re not a long-term resident (fewer than 8 years), you can skip this step—exit tax doesn’t apply to you.

If you are a long-term resident, determine whether you’d be a “covered expatriate” subject to exit tax. You’re covered if you meet ANY ONE of these three tests:

Test #1: Net Worth Test

Your net worth equals or exceeds $2 million on the date you abandon your green card.

Calculate your net worth by adding:

Cash and bank accounts (U.S. and foreign)
Real estate (primary residence, rental properties, foreign property)
Investment accounts (stocks, bonds, mutual funds)
Retirement accounts (401(k), IRA, foreign pensions)
Business interests (U.S. or foreign companies)
Personal property (vehicles, jewelry, art, collectibles)

Then subtract:

Mortgages
Loans
Credit card debt

Important: Use fair market value (what you could sell assets for today), not what you paid for them.

If your net worth is below $2 million, you don’t meet this test.

Test #2: Average Annual Net Income Tax Liability Test

Your average annual net U.S. income tax for the prior 5 years exceeds $206,000 (2025 threshold, adjusted annually).

This is NOT your total income—it’s the actual tax you owed after all credits and deductions.

How to calculate:

Find your Form 1040, line 24 (total tax) for each of the last 5 years
Subtract any foreign tax credits
Add those 5 years together and divide by 5

If the average is below $206,000, you don’t meet this test.

Test #3: Tax Compliance Certification Test

You cannot certify on Form 8854 that you’ve complied with all U.S. federal tax obligations for the 5 years before abandoning.

If you can’t honestly certify full compliance—even for a single missing FBAR or one unreported foreign account—you automatically become a covered expatriate.

This is why Step 2 (getting compliant first) is so critical.

If You’re a Covered Expatriate

You’ll owe exit tax on unrealized gains above $890,000 (2025 exclusion amount). The IRS treats you as if you sold all your worldwide assets for fair market value the day before abandoning, even though you didn’t sell anything.

Example: Your total unrealized gains are $1.5 million. After the $890,000 exclusion, $610,000 is taxable at capital gains rates (typically 15-20%), resulting in approximately $92,000-$122,000 in exit tax.

Special rules apply to retirement accounts, deferred compensation, and trusts—these can significantly increase your tax bill and require professional calculation.

Strategic Timing Considerations

If you’re close to any threshold:

Below $2 million net worth: Consider making gifts to family members or paying down debt before abandoning to bring your net worth below the threshold.
Close to the tax liability threshold: Time your abandonment in a year with lower income or after making charitable contributions that reduce your average.
Missing some filings: Get fully compliant through Streamlined Filing before abandoning, allowing you to pass the certification test.

Step 4: Choose Your Abandonment Timing Strategically

When you file Form I-407 matters significantly for tax purposes. Your expatriation date is the date you file the form or the date USCIS receives it by mail.

If You’re NOT Yet a Long-Term Resident (Under 8 Years):

File Form I-407 before you hit the 8-year mark to avoid any possibility of exit tax.

Example: You received your green card in February 2019. By December 31, 2025, you’ll have held it for 7 calendar years. If you file Form I-407 in December 2025, you avoid long-term resident status. If you wait until January 2026, you’ll hit 8 years and trigger potential exit tax liability.

If You’re Already a Long-Term Resident:

File early in the tax year to minimize the resident portion of your final year. Filing in January means only one month of worldwide income reporting; filing in December means reporting 11 months of worldwide income.

Consider your income timing. If you’re expecting a bonus, large capital gain, or other significant income event, filing before or after that event can affect your final tax liability.

Account for state tax implications. Some states, like California and Virginia, are “sticky” about residency. If you maintain ties to these states, changing your state of residence before abandoning your green card can help prevent ongoing state tax obligations.

Step 5: Complete and File Form I-407

Once you’ve decided to proceed, completed your tax compliance, and chosen your timing, you’re ready to file Form I-407.

Gather Required Documents

You’ll need:

Your physical green card
Valid passport from your country of citizenship
Any reentry permits or refugee travel documents issued by USCIS
Your alien registration number (A-number)

Complete Form I-407

Download the current form from the USCIS website and complete all sections:

Part 1: Your personal information (name, date of birth, country of birth, A-number)
Part 2: Your green card details (receipt number, card number, issue and expiration dates)
Part 3: Reason for abandonment (most people select “I wish to abandon my permanent resident status”)
Part 4: Your intended country of future residence and whether you plan to apply for a non-immigrant visa
Part 5: Your current contact information, signature, and date

Choose Your Filing Method

You have three options for filing:

Option 1: Mail to USCIS

Mail completed Form I-407 and your physical green card to:

USCIS
Attn: I-407
31 Rochester Avenue
Portsmouth, NH 03801

Use certified mail with a return receipt. Keep copies of everything.

Processing time: 4-8 weeks for confirmation
Expatriation date: Date USCIS receives your mailing

Option 2: Submit at U.S. Embassy or Consulate

Make an appointment at a U.S. embassy or consulate in your country. A consular officer will:

Witness your signature
Take possession of your green card
Provide immediate confirmation

Processing time: Immediate
Expatriation date: Date of your appointment

Option 3: Submit at U.S. Port of Entry

If you’re traveling to the U.S., submit to a CBP officer when you enter. The officer may allow temporary admission or require you to apply for proper authorization.

Processing time: Immediate
Expatriation date: Date of submission

Important: This is the least predictable option. The embassy/consulate route provides more certainty.

Save Your Confirmation

USCIS will provide written confirmation that your lawful permanent resident status has been terminated. This confirmation is essential for your tax filings—it proves your expatriation date for IRS purposes.

Step 6: File Your Final U.S. Tax Returns

After filing Form I-407, you must complete your final U.S. tax filings. Requirements depend on whether you’re a long-term resident.

For All Green Card Holders:

File your final Form 1040 for the year you abandon. You have two options:

Option 1: Dual-Status Return
File Form 1040 for January 1 through the day before your I-407 filing (worldwide income). File Form 1040-NR for the rest of the year (U.S.-source income only). Learn more about dual-status filing.

Option 2: Full-Year Resident Return
File Form 1040 for the entire year reporting worldwide income. This allows you to use the standard deduction and potentially file jointly with a U.S. citizen spouse, which may reduce your overall tax.

File FBAR and Form 8938 if your foreign accounts exceeded $10,000 at any point during the year or if you meet FATCA thresholds.

For Long-Term Residents Only:

File Form 8854 with your final tax return. This form:

Certifies your 5 years of tax compliance
Calculates your net worth on your expatriation date
Determines if you’re a covered expatriate
Reports the exit tax owed (if applicable)

Form 8854 is due with your tax return for the year you abandon (April 15 deadline, extendable to October 15).

If you’re a covered expatriate, you’ll report the deemed sale of all assets and calculate tax owed on gains above the $890,000 exclusion.

After Your Final Return

Going forward, you’re no longer a U.S. tax resident. Your future filing requirements depend on whether you have U.S.-source income:

No U.S. income: No further filing requirements
U.S. rental property: File Form 1040-NR annually, reporting rental income
U.S. investments: Report dividends, interest, and capital gains on Form 1040-NR (typically subject to 30% withholding)
U.S. business income: File Form 1040-NR reporting business profits

Step 7: Handle State Tax Obligations

Don’t forget about state taxes. Even after abandoning your green card, you may have state filing requirements if you maintained ties to a U.S. state.

Review Your State Connections

Do you have any of these ties to a state:

Driver’s license or state ID
Vehicle registration
Voter registration
Property ownership (including rental or investment property)
Bank accounts
Professional licenses
Family members living there

If yes, that state may still consider you a resident for tax purposes, requiring you to file state returns and report worldwide income.

Sticky States to Watch

California, New York, Virginia, New Mexico, and South Carolina are particularly aggressive about maintaining tax jurisdiction over former residents. If you have any ties to these states, you may need to take specific steps to terminate state residency.

File Final State Returns

For the year you abandon your green card, file either:

A part-year resident return (if the state recognizes your departure)
A non-resident return (if you have ongoing state-source income)
No return (if you successfully severed all ties)

Professional guidance on state tax obligations can prevent surprise tax bills years later.

Step 8: Plan for Future U.S. Visits

After abandoning your green card, you can still visit the U.S.—but you’ll need proper authorization.

Apply for ESTA or a Tourist Visa

If you’re from a Visa Waiver Program country, apply for ESTA (Electronic System for Travel Authorization) online. This allows visits of up to 90 days for tourism or business.

If you’re not from a VWP country, apply for a B-1/B-2 tourist visa at a U.S. embassy or consulate.

Important: Apply well before any planned trips. Processing times vary, and you cannot enter the U.S. on your abandoned green card.

What You Can and Can’t Do

With tourist authorization, you can:

Visit family and friends
Attend business meetings or conferences
Tourism and sightseeing

You cannot:

Work in the U.S.
Attend school full-time
Live in the U.S. permanently
Stay longer than your authorized period

If You Want to Return Permanently Later

Abandoning your green card is permanent. If you later decide you want to live in the U.S. again, you must:

Apply for a new immigrant visa from scratch
Meet all eligibility requirements again
Wait through the entire processing period
There’s no “reactivation” or expedited process

This is why the decision to abandon should be made carefully.

Common Mistakes to Avoid

Filing Form I-407 without getting tax compliant first. If you can’t certify 5 years of compliance on Form 8854, you automatically become a covered expatriate. Always catch up on missing returns before abandoning.
Not calculating the exit tax before abandoning. If you’re a long-term resident with assets approaching $2 million, calculate your potential exit tax liability before filing Form I-407. Strategic timing or gifts to family members might significantly reduce your tax.
Assuming a simple filing timeline. Your final tax return is due April 15 of the year after you abandon. If you abandon in late 2025, your final return isn’t due until April 15, 2026. Form 8854 is due with that return.
Forgetting about state taxes. Federal and state obligations are separate. Abandoning your green card doesn’t automatically end state residency—you must sever specific ties.
Filing Form 1040-NR while still holding a green card. Don’t signal to USCIS that you’ve inadvertently abandoned your status. File as a resident until after you formally submit Form I-407.
Not keeping documentation. Save copies of your Form I-407, USCIS confirmation, final tax returns, Form 8854, and all supporting documents. You may need them if the IRS audits your final return or if you need to prove your abandonment date.
Assuming you can change your mind. Abandonment is permanent. Once USCIS processes Form I-407, there’s no way to withdraw it or reactivate your status.
If you already qualify as a Long-Term Resident (meaning you held a green card for any part of 8 calendar years within a 15-year period), use extreme caution when claiming treaty benefits on Form 8833, because taking a treaty position is considered a deemed expatriation, which requires filing Form 8854 to avoid penalties starting at $10,000 and potentially subjects you to the exit tax.

Need Help with the Green Card Abandonment Process?

Abandoning your green card involves coordinating immigration forms, final tax filings, potential exit tax calculations, and state tax considerations. Getting the sequence and timing right prevents costly mistakes.

Whether you need help determining if you’re a long-term resident, catching up on unfiled returns through Streamlined Filing, calculating exit tax exposure, preparing Form 8854, or completing your final tax returns, we can guide you through every step.

If you’re ready to be matched with a Greenback accountant, click the Get Started button below. For general questions on US expat taxes or working with Greenback, contact our Customer Champions.

Get Your Step-by-Step Abandonment Plan

You can get a clear order of operations for I-407, final filings, and future U.S. visits.

This article is for informational purposes only and does not constitute tax, legal, or immigration advice. Green card abandonment and expatriation tax rules are complex and subject to change. Please consult with qualified tax and immigration professionals regarding your specific situation before abandoning your green card.

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