Is TD status resident alien or non-resident alien for tax purpose?

T

ThePresident777

New Member
I hold a TN-visa since 2015 and I'm considered as resident-alien for tax purposes. My wife joined me in October of this year on a TD visa. As TN-dependent (TD) status, is she considered resident or non-resident alien for tax purposes?

I ask this because on the IRS' W4 form for Tax Withholding Allowance Certificate, I need to specify my marital status. Normally, I would put "married" but they have a little note saying "Note: If married, but legally separated, or spouse is a nonresident alien, select "Single" Marital Status.". Now I am confused, should I select Married or Single?

Thank you
TP
 
She is a resident alien for a year if she passes the Substantial Presence Test (days in the US this year + 1/3 days in the US the previous year + 1/6 days in the US the year before that >= 183 days); otherwise she is a nonresident alien for the year.

But even if she is a nonresident alien, you can choose to treat her as a resident alien and file as Married Filing Jointly with her by using the Nonresident Spouse Treated as Resident election. If you don't choose to do this, then you can only file as Married Filing Separately since nonresident aliens cannot file jointly. In past years, before your wife came to the US, she was also a nonresident alien; how did you file your taxes then?

Note that resident aliens are subject to US taxes on their worldwide income, though she may be able to exclude ~$100k of foreign earned income from before she came to the US using the Foreign Earned Income Exclusion.
 
Oh, thank you very much for pointing out the IRS publication 519. She doesn't meet the substantial presence test, but with the IRS publication 519, we can file jointly and she can be considered as resident alien.

We were not married until September this year, shortly before she joined me in US, and so last years I filed as a single. She was living in Canada and had nothing to do with US taxes until she arrived here.

Regarding the worldwide income, she did have income in Canada but obviously none in USA. Does she still need to declare this? Sounds weird to declare stuff that your earned before arriving in USA. Also, her income was way less that 100K. Do you have the link to the Foreign Earned Income Exclusion? I totally got lost in the IRS website...
 
This section of Publication 54 talks about the Foreign Earned Income Exclusion. She can use the Physical Presence Test on the 12 months before she came to the US (the 12 months do not have to match up with calendar years).
 
Thank you! It seems that she still has to meet the physical presence test (which she doesn't even when previous years are counted) for the exclusion to apply. Which means that she'll be double taxed and will need to claim credit in US. That's a complicated scenario. On the other hand, if she declare as a non-resident alien, I can't have her as my dependent which will increase my tax liabilities presumably... It's kind of a tricky situation.
 
I answer detailed tax questions at serbinski.com. Cdns are not subject to the normal non-citizen standards for being treated as tax residents, and can almost always file as an American would, including filing as a US resident, even if never having set foot in US. So Pub 519 is not so useful to follow (54 is more relevant) Most TNers with spouses living in Canada file jointly, and certainly do when the spouse joins them in US.
 
Thank you Nelsona. We will file jointly as resident-aliens, however this comes with a burden of reporting my wife's Canadian income to US and being double taxed on it. On the other hand, if she file as resident-alien in US, she has to file as non-resident in Canada and pay Supplementary Tax of 7% imposed to Canadian non-residents. It's kind of ridiculous...

Also, should I file the Treasury Form TD F 90-22.1 ("FBAR") form?! I never did that and I just read that CBC article on serbinski web site.
 
The "election" to be treated as a US resident does NOT change a persons Cdn tax residency. There is no supplementary INCOME tax on non-residency in any case. Serbinski for more info please...
 
You must log in or register to reply here.
Top