Do you need a Sailing permit on leaving the US?
A century-old IRS rule that technically still applies to every departing green card holder and long-term visa worker, and why almost nobody follows it.
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What is a Sailing Permit?
Officially it is called a "Certificate of Compliance," and it dates back to a 1921 tax law aimed at stopping people from leaving the US with unpaid tax bills.
It is not an immigration document and it has nothing to do with your visa, your green card, or Customs and Border Protection at the airport. It is purely an IRS sign-off that says you have squared away your US tax liability before a long-term or permanent departure.
If you are a green card holder, an H-1B worker, or anyone else classified as a US tax resident and you are planning to leave the US for good (or for a long stretch), the law technically requires you to get this clearance before you go.
If you are Returning from the US (or just have heavy US investments), we wrote an article on how to manage US estate taxes that you may find useful.
Who Is Supposed to Get One
The requirement is broad on paper.
It applies to most resident and nonresident aliens leaving the US long-term.
But the IRS carves out an exemption list, and most of the categories below cover ordinary students and short-term visitors, not the typical returning NRI.
Exempt category | Who this covers |
Diplomats | Foreign government representatives on diplomatic passports, and their households |
Students & trainees | F, H-3/H-4, J, Q visa holders with no US-source income beyond scholarships or approved work |
M-visa students | Vocational students meeting the same income restrictions |
Short-term visitors | B-1/B-2 visitors, Visa Waiver entrants under 90 days, transit passengers |
Cross-border commuters | Canadian and Mexican residents commuting for wage work with tax withheld |
Notice who is not on this list: A green card holder or H-1B employee moving back to India permanently after years of working in the US.
The Forms: 2063 vs 1040-C
If you did have to comply, there are two possible forms, and which one applies depends on your tax position for the departure year and the year before it.
Form | Who files it | What it does |
Form 2063 | No taxable income in the departure year or the prior year (or a resident alien whose departure will not hinder tax collection) | A short statement, no tax due at filing |
Form 1040-C | Everyone else with a tax liability | Reports income up to the departure date, tax is computed and generally paid on the spot |
In theory you apply at a local IRS Taxpayer Assistance Center - ideally two to four weeks before you fly out, bringing your passport, prior returns, and proof of your departure date.
Need help planning your return?
Our team of experts specializes in cross border finance and tax situations. We would be happy to help. Contact us now!
Do you actually need a Sailing permit? Is It Enforced?
Honest answer? no, not in any practical sense.
No one has been asked for a sailing permit at departure in years. There is no checkpoint for it. Airlines do not ask for it. CBP officers at the airport are not checking for it when you exit the US. It simply is not part of the actual departure process for the vast majority of people who leave.
Why does an unenforced law stay on the books? Partly budget. IRS Taxpayer Assistance Centers that used to process these have closed or scaled back, and even commentators who cover this rule note that stricter enforcement would be hard to deliver given how few offices are left to issue the permit.
It is a rule that survives on paper because nobody has bothered to repeal it, not because anyone is checking for it.
Should You Still Bother? Our Take for Returning NRIs
We are not going to tell a client to spend hours getting an IRS appointment for a document nobody checks. But "not enforced" is not the same as "doesn't matter," and there are two things worth separating clearly.
The sailing permit itself: skip it. In practice this is a dead requirement for people moving back to India, and we have never seen a client asked for one at the airport.
Your actual US tax filings: do not skip these. The sailing permit was only ever a mechanism to force early payment of tax you would owe anyway.
Your real obligation, filing a final-year US return (dual-status if applicable) and settling what you owe the IRS, does not go away just because the permit process is dormant.
Planning your Return to India?
We know this is a very stressful time and a small mistake in planning can cost you millions in taxes. Our team of experts has helped 100+ clients with their return to India. We would be happy to assist.
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