Tax Return - claiming dependent for B2

HolyRiver

Registered Users (C)
#1
I saw a few references to a query on Tax Returns and claiming dependent for B2 in this portal and others too – however could not get a satisfactory answer. The following is some information I have learnt, on which to base your judgment:

(1) To claim a person as a dependent that person has to pass the Dependency Test (explained in Publication 501 in the IRS web site)
Direct Link to the Publication:
http://www.irs.gov/publications/p501/ar02.html#d0e999
Basically it says that the person has to pass five tests to be considered a dependent (and hence take an exemption in YOUR return). These tests are:
1. Member of Household or Relationship Test; 2. Citizen or Resident Test; 3. Joint Return Test; 4. Gross Income Test; 5. Support Test
These “tests” are self explanatory if you read them in the publication. I am assuming for those of us who have parents/in-laws visiting us, the person in question will meet “tests” 1, 3, 4 and 5. Please check for your individual case. The MOST crucial question is whether they will “pass” the 2nd test (viz., Citizen or Resident Test).

(2) If the person is visiting you on a Visitor Visa (B2) then they will need to check if they qualify as a “resident alien”. This happens IF and WHEN the person in question has stayed in the US for a specific period of time in specific years. To explain further:
The person has to determine if he/she is a Resident Alien or a Non-Resident Alien using the chart in Publication 519 in the IRS web site:
http://www.irs.gov/publications/p519/15023t02.html
In the chart please change the reference of year 2003 to 2004; year 2002 to2003 and Year 2001 to 2002, to determine “your status for year 2004” (the word “your” in the chart refers to the person – father/mother/mother-in-law/father-in-law)

The most important question in the chart is “Were you physically present in the United States on at least 183 days during 2004”:
(2) (a) If the answer is “Yes” then he/she is a “Resident Alien for US Tax Purposes” – meaning YOU can claim that person as a dependent and take an exemption while filing your tax returns.
This will obviously happen only if that individual has sought and received approval to extend their stay beyond 6 months – meaning that person is LEGALLY in the US for 183 days or beyond.
(2) (b) If the answer is “No” then the next question is “Can you show that for 2004 you have a tax home in a foreign country and have a closer connection to that country than to the United States”.
In MOST (almost all) cases the answer will be “Yes” and hence that person is a “Nonresident alien for US Tax purposes” – meaning YOU CANNOT claim that person as a dependent.

(3) For seeking this clarification I had spoken to a representative in IRS (Toll Free 1-800-829-1040). The person who came on line said someone will “research” the question and come back to me. They did (within 24 hours) and I spoke to the lady who confirmed the above.
The question then remains is obtaining the TIN for that person.
For that the person in question (parents/in-laws) will need to apply on Form W-7 with required documentation (passport etc). It could take 6 weeks or so to get the TIN. Link for Form W-7
http://www.irs.gov/pub/irs-pdf/fw7.pdf
The IRS representative suggested that the person could fill in Form W-7 and you could attach it (with supporting documents for W-7) with your return while mailing the return (e-file will not be possible in this case). The number will get assigned when your return is processed.

(3) Please note that I have NOT tried to apply for a TIN (for my mother-in-law) because she did not meet the 183 days in 2004 (though she meets 183 days for 2004 and one-third days in 2003). I have READ in some forums (either on this site or elsewhere) that IRS has stopped giving TINs to people with visitor visas. I DO NOT KNOW IF IT IS TRUE – but you can always give it a shot, especially after the IRS representative commented that “it does not matter what visa he/she is on”. I think while applying for TIN – Form W-7 - you will need proof that he/she has been here for 183 days or more (legally) – by providing the copy of passport and Approval Notice for extension of stay.

Hope this has helped. Remember this is the info that I have got – you might still want to check with your CPA.
 

Handsome1

Registered Users (C)
#2
YES you can claim as your dependent

The reference you gave is for "Resident Alien" means who are resident of USA but lives overseas. The 183 days rule applies on them. Code says "A resident alien is taxable on income from all sources, including sources outside the US, at the same rates and in the same manner as a US Citizen"

The 5th dependency test you referred to, the exact code says this " The dependent must be a citizen, a national or resident of the US, a resident of Canada or Mexico at SOME TIME during the calendar year in which the tax year of the tapayer begins, or an alien child adopted by and living with a US Citizen or national as a member of his household for the entire tax year (Code Sec.152(b)(3); Reg. 1.152-2(a)(2)"

I do not see any time limit that someone has to met. The time limit for 180 days has changed in 2004. The code clearly says "AT SOME TIME DURING THE CALENDAR YEAR"
So good news is you can claim your visitors as your dependent (of course other 4 conditions have to meet).

I am professional accountant, so take my word for it. Hope it helps. All the best !
 

HolyRiver

Registered Users (C)
#3
Defining "resident"

That is exactly what I thought till I called IRS to clarify. The lady who called back from IRS (after "researching" the issue) pointed me to the chart (Figure 1A in Publication 519) to determine if that person qualifies as a resident.

I would still like to believe you - maybe the lady from IRS does not know the correct interpretation; maybe not.
It is one thing to claim an exemption for a "dependent" but what if it is based on a factually incorrect notion?
 

tjeff

Registered Users (C)
#4
Handsome1 said:
The reference you gave is for "Resident Alien" means who are resident of USA but lives overseas. The 183 days rule applies on them. Code says "A resident alien is taxable on income from all sources, including sources outside the US, at the same rates and in the same manner as a US Citizen"

The 5th dependency test you referred to, the exact code says this " The dependent must be a citizen, a national or resident of the US, a resident of Canada or Mexico at SOME TIME during the calendar year in which the tax year of the tapayer begins, or an alien child adopted by and living with a US Citizen or national as a member of his household for the entire tax year (Code Sec.152(b)(3); Reg. 1.152-2(a)(2)"

I do not see any time limit that someone has to met. The time limit for 180 days has changed in 2004. The code clearly says "AT SOME TIME DURING THE CALENDAR YEAR"
So good news is you can claim your visitors as your dependent (of course other 4 conditions have to meet).

I am professional accountant, so take my word for it. Hope it helps. All the best !
I visited my bf dec 2003 until feb 2004,and then i came back here aug 2004 and married him on sept 2004,but he asked somebody that he can't claim me as his dependant, if my visit until feb 2004 counted,so it means i've been here for almost 6 months, that makes us so confused and besides will it give us problems with ins because he didnt claim me as his dependent on his tax return?
I do appreciate your answer and thank you much in advance!
 

Handsome1

Registered Users (C)
#5
If taxpayer is married even on the last day of the year or have a new born baby even on 12/31/04, spouse or the child can be claimed as dependent for that year. Since you got married in 2004 (does not matter when) he can claim you as dependent. Hope it helps ! All the best !!
 

lz

Registered Users (C)
#6
Residency test

HolyRiver said:
(3) Please note that I have NOT tried to apply for a TIN (for my mother-in-law) because she did not meet the 183 days in 2004 (though she meets 183 days for 2004 and one-third days in 2003). I have READ in some forums (either on this site or elsewhere) that IRS has stopped giving TINs to people with visitor visas. I DO NOT KNOW IF IT IS TRUE – but you can always give it a shot, especially after the IRS representative commented that “it does not matter what visa he/she is on”. I think while applying for TIN – Form W-7 - you will need proof that he/she has been here for 183 days or more (legally) – by providing the copy of passport and Approval Notice for extension of stay.
Hi HolyRiver,

I'm thinking to claim my mom as my dependent for 2005 and your post really helped a lot! My mom came in Feb 05 and will leave in Aug 05. Her stay in 2005 does not meet the 183 days but if including her stay in 2004 (one-third days) she does. My question is: why didn't you claim your mother-in-law as dependent for 2004? is there any potential issue with using last year's days to count towards the 183-day limit?

Thank you in advance.
lz
 

HolyRiver

Registered Users (C)
#7
Hi lz,

In your case, as I understand, your Mom would have stayed in the US for more than 183 days in 2005 alone. Hence she would have answered “YES” to the three questions pertaining to length of stay in the IRS publication:

http://www.irs.gov/publications/p519/15023t02.html

The chart refers to status for 2004 – appropriate changes in the years (2004 to 2005; 2003 to 2004 and 2002 to 2003) can be made for determining status for 2005.

As far as my m-i-l, since she goes back in July (after obtaining a legal extension on her I-94) – I can take an exemption for her for my 2005 Tax Return. I could not do so in 2004 – since she had not completed 183 days in 2004. Further, for most of us (who have parents/in-laws visiting), the answer (in my opinion) to the last relevant question in the chart “Can you show that for 2004 you have a tax home in a foreign country and have a closer connection to that country than to the United States?” should be “YES” – thus making him/her a “NON-RESIDENT” alien for US Tax purposes.

Hence the best scenario is for a visiting individual to be claimed as a dependent is to be present in the US for 183 days in that particular year (and also meet the other four ‘tests’ 1. Member of Household or Relationship Test; 3. Joint Return Test; 4. Gross Income Test; 5. Support Test).

A piece of important information, that I thought I should share (one CPA whom I corresponded with specifically pointed this out) is that in the Gross Income Test, if the gross income (of the mother/father/ m-i-l / f-i-l) is more than $3100 (for that particular year), you cannot claim their dependency exemption. He said the Gross Income would refer to “worldwide income”. Hence, if one’s father/mother were to be working/drawing pension/earning interest income in his/her home country which exceeds the equivalent of $3100 then he/she cannot be claimed as a dependent.

Also, remember that the Individual Taxpayer Identification Number (ITIN) is required for that “dependent” – can be applied in person (I think preferable) at any IRS office.

Let me repeat this - all the info above is something that I have compiled – you might still want to check with your CPA. I am not sure if all the CPAs will come to the same exact conclusion – ultimately each person will have to have to take the decision (of claiming visiting dependents as exemptions) himself/herself, depending on their individual case.

All the best!

Quotes :)

I always imagined that a client needs at least two tax advisors. One tells him what the law is. The other tells him what he wants the law to be. Then he can choose.
--Terence Floyd Cuff

A taxpayer may engineer his transactions to minimize taxes, but he cannot make a transaction appear to be what it is not.
--Irving Loeb Goldberg
 

lz

Registered Users (C)
#8
Hi HolyRiver,

My mom didn't extend her 6-month visa so she is barely off the 183-day! :mad: I thought she could pass the substantial presence test, but obviously she has a closer connection to a foreign country. But I want to thank you for the clarifications! You are a great help!

lz
 

h1details

Registered Users (C)
#9
Query

ihi all, thank you very much for the post. i appreciate it.

my m-i-l got 6months visa , so if i calculate properly she has got 183days stay here . (including some months 31days ). can i claim dependent for her? thanks, nanban
 
Last edited by a moderator:

J1victim

Registered Users (C)
#10
Tax return with visitors

h1details said:
ihi all, thank you very much for the post. i appreciate it.
my m-i-l got 6months visa , so if i calculate properly she has got 183days stay here . (including some months 31days ). can i claim dependent for her? thanks, nanban
interesting post
 
#11
Tax return for dependent when it's 182 days
I got married recently and My wife will be joining me in US on Jul 3 2015. Her stay would be 182 days with me in US for the year 2015. i.e. she will not meet the 183 days stay criteria. Can I claim her as dependent for the 2015 tax return. I'm on H1B. -Thanks in advance
 

Okkos

New Member
#12
I saw a few references to a query on Tax Returns and claiming dependent for B2 in this portal and others too – however could not get a satisfactory answer. The following is some information I have learnt, on which to base your judgment:

(1) To claim a person as a dependent that person has to pass the Dependency Test (explained in Publication 501 in the IRS web site)
Direct Link to the Publication:

Basically it says that the person has to pass five tests to be considered a dependent (and hence take an exemption in YOUR return). These tests are:
1. Member of Household or Relationship Test; 2. Citizen or Resident Test; 3. Joint Return Test; 4. Gross Income Test; 5. Support Test
These “tests” are self explanatory if you read them in the publication. I am assuming for those of us who have parents/in-laws visiting us, the person in question will meet “tests” 1, 3, 4 and 5. Please check for your individual case. The MOST crucial question is whether they will “pass” the 2nd test (viz., Citizen or Resident Test).

(2) If the person is visiting you on a Visitor Visa (B2) then they will need to check if they qualify as a “resident alien”. This happens IF and WHEN the person in question has stayed in the US for a specific period of time in specific years. To explain further:
The person has to determine if he/she is a Resident Alien or a Non-Resident Alien using the chart in Publication 519 in the IRS web site:

In the chart please change the reference of year 2003 to 2004; year 2002 to2003 and Year 2001 to 2002, to determine “your status for year 2004” (the word “your” in the chart refers to the person – father/mother/mother-in-law/father-in-law)

The most important question in the chart is “Were you physically present in the United States on at least 183 days during 2004”:
(2) (a) If the answer is “Yes” then he/she is a “Resident Alien for US Tax Purposes” – meaning YOU can claim that person as a dependent and take an exemption while filing your tax returns.
This will obviously happen only if that individual has sought and received approval to extend their stay beyond 6 months – meaning that person is LEGALLY in the US for 183 days or beyond.
(2) (b) If the answer is “No” then the next question is “Can you show that for 2004 you have a tax home in a foreign country and have a closer connection to that country than to the United States”.
In MOST (almost all) cases the answer will be “Yes” and hence that person is a “Nonresident alien for US Tax purposes” – meaning YOU CANNOT claim that person as a dependent. Tax advisor near me yourbooksontime.com/tax-advisors great company Your Books On Time!

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Alexandria, VA 22315
Telephone: 703-283-8298


(3) For seeking this clarification I had spoken to a representative in IRS (Toll Free 1-800-829-1040). The person who came on line said someone will “research” the question and come back to me. They did (within 24 hours) and I spoke to the lady who confirmed the above.
The question then remains is obtaining the TIN for that person.
For that the person in question (parents/in-laws) will need to apply on Form W-7 with required documentation (passport etc). It could take 6 weeks or so to get the TIN. Link for Form W-7

The IRS representative suggested that the person could fill in Form W-7 and you could attach it (with supporting documents for W-7) with your return while mailing the return (e-file will not be possible in this case). The number will get assigned when your return is processed.

(3) Please note that I have NOT tried to apply for a TIN (for my mother-in-law) because she did not meet the 183 days in 2004 (though she meets 183 days for 2004 and one-third days in 2003). I have READ in some forums (either on this site or elsewhere) that IRS has stopped giving TINs to people with visitor visas. I DO NOT KNOW IF IT IS TRUE – but you can always give it a shot, especially after the IRS representative commented that “it does not matter what visa he/she is on”. I think while applying for TIN – Form W-7 - you will need proof that he/she has been here for 183 days or more (legally) – by providing the copy of passport and Approval Notice for extension of stay.

Hope this has helped. Remember this is the info that I have got – you might still want to check with your CPA.

thank you for the detailed information!
 
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