Info of Stimulus Rebate

nelsona

nelsona

Registered Users (C)
For TNers (and others) who did NOT get the Stimulus payment this past summer, this has been morphed into the Recovery Rebate Credit (line 70 of the 2008 Form 1040).

Unfortunately, the same rules on requiring an SSN are still in place, so if you did not qualify because you filed jointly and your spouse did not have an SSN (had only an ITIN), then -- unless they now have one -- you are still out of luck.

You would need to decide if filing separately (MFS) would be worth the $600 for you. It is most likely-- since by and large the TN is paid a professional wage and the TD does not work -- that filing MFS would result in far more than $600 in extra tax vs filing MFJ, but it may be worthwhile trying both scenarios.

Children also still require SSNs as well to get the extra $300 per child.


And before anyone asks, since it is the SSN and not citizenship nor residence that is being used as a criteria for this Payment/credit, the tax treaty does not provide an overide of this requirement.
 
YEEEEEEAAAAHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!...

- got my valid SSN - check!
- wifey just got her SSN - check!
- kids got SSN - check!
- I know where on tax form to fill (line 70 of the 2008 Form 1040) - check!

...'bout time I got my bush dollars...I wonder if Obama dollars will be coming too :)
 
I spoke to my accountant this morning and according to her only US residents are eligible for the rebate credit.

Therefore, because I commute into the US daily for work and file a 1040NR (non-resident) tax return, I will not be able to claim this rebate credit.

If she is incorrect and someone here has information to the contrary, that will allow me to claim the rebate credit, then let me know.
Thanks,
BCH
 
Those filing 1040NR are ineligible.

Of course, there is nothing stopping you , as a Cdn, -- by treaty -- from filing a 1040, reporting world income, and collecting the $600. Unless you have a lot of Cdn income (like rentals, etc) the extra tax you might pay filing a 1040 (which may be minimal) will be outweighed by the $600.

If you are married and/or have kids, you should have been filing a 1040 (or at least a non-discrimination 1040NR) for years now.
 
I was just married two months ago and I spoke with my accountant again yesterday and I will be filing a non-discrimination 1040NR under Article 25 (I think I have the lingo correct).

She did say yesterday that I cannot file a straight 1040 because I do not pass the ‘Substantial Presence Test’. As a daily commuter into MI from Windsor, my 240 days a year of work in the US are not counted because they are considered commuter days.
BCH
 
You should file a non-discrim XXV 1040NR... as all married Cdn commuters should. It results in lower taxes, as I've propouned for YEARS at forums.serbinsi.com.

However, because the Stimulus law was worded as requiing an SSN, and not merely living in US, you will not get the Stimulus.

The treaty treats residents of canada the same as US residents. A US resident with a spouse with no SSN will not get the stimulus, so nor will you. The treaty offers no protection on this.

That said, there is absolutely no harm in actually filing for it. Let the IRS deny it.

and by the way, all Cdns are by that treaty cluase permitted to fiel a 1040 just like any other US resident. (That will change under the new treaty, but for now, you can). This doesn't help you for the stimulus though.
 
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This will be my last post on this subject.

Seeing as I just recently got married, I will file a “non-discrim XXV 1040NR” in the new year.

However, I need some clarification on another item what you just posted.

I am Canadian. Prior to getting married in September, I have been commuting from Windsor to MI for work since 1999. I was never married nor did I have any dependants during this time. For the last six years I’ve owned my own house in Windsor. My US income was my only income during this time.

You state “by the way, all Cdns are by that treaty cluase permitted to fiel a 1040 just like any other US resident”.

However my accountant is adamant that I did not qualify to file a 1040 during this period because I did not pass the “substantial presence test” so I had no other choice but to file a 1040NR.

Question 1: In general, by not filing a 1040, did I over pay US taxes during this period?

I have read the Article XXV, Non Discrimination here;

http://www.irs.gov/businesses/international/article/0,,id=169503,00.html

To be honest my eyes glaze over as I read it.

Question 2: Is Article XXV the article you refer to as “that treaty cluase permitted to fiel a 1040 just like any other US resident” or is it a different clause?

Any information that I can provide to her so she is made aware of this is appreciated.
Thanks,
BCH
 
As you appreciate, this is not a tax forum, so I would suggest posting on forums.serbinski.com.

There are dozens on that site who file 'as resident' by virtue of the XXV clause.

I would think that a Windsor accountant would be more savvy on cross-border matters, but there you go. The key is the second paragraph of XXV, and the third-party state is Germany, whose citizens are allowed to file 1040, by virtue of their Article 24 which is worded slightly differently. Canadians thus enjoy the same right.

In any event, I wouldn't get too worked up about not getting the stimulus. All it means is that your US tax will be a little higher, and you will then pay less to canada. If you got the stimulus, you would pay that much more to canada.


Your accountant is right to file the non-discrim XXV since you are married, and that is really all you need to know for 2008.. and, as I said, the new treaty contains wording that will no longer permit Cdn residents from filing a 1040 if not otherwise permitted. The married non-discrim XXV 1040NR will continue unchanged.
 
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And as to your Question whether you overpaid US by filing 1040NR in the past? Unless you had 'leftover' US tax that you were not able to use asa foreign credit, the answer is 'no'.
 
nelsona said:
Unfortunately, the same rules on requiring an SSN are still in place, so if you did not qualify because you filed jointly and your spouse did not have an SSN (had only an ITIN), then -- unless they now have one -- you are still out of luck.
Click to expand...


Here's our scenario:

I'm on TN with established SSN and ready to buy a house before Nov 30, 2009. My wife will be joining me with her TD in Sep 2009. As a single income earner my salary exceeds $75K, which puts me out for the full $8000 tax credit stimulus. However, if my spouse files together (she can't work under TD) we can claim $150K as joint. That means she'll have to have ITIN right after she gets her TD so we can file together. But the trick is, she can only file ITIN when I do my taxes, which is the same time I can claim the $8000 tax credit for home purchase in 2009. It's sort of like the chicken before the egg thing. So I don't even know if we can qualify for the tax credit since her ITIN might not be recognized at that point.
 
Don't confuse the Stimulus rebate (now known as the Recovery credit) with the other stimulus related tax credits.

The mechanism for filing jointly with the spouse who does not have SSN or ITIN isstill the same: you file the return 'as if' she has the number along with the W-7 request. They will be handled simulataneously, and your return will be processed correctly.

I have not heard that having an ITIN will prevent or reduce any of the other stimulus credits. They are after all, a credit for money spent, not simplya a gift like the rebate was.
 
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