Yes, you may file married filing jointly under the conditions I will outline below. First though, let me answer your latter question. Your wife would not be able to apply the US/Canada tax treaty unless she is considered a Canadian resident since she is not considered a US resident any longer. Please read this Turbo Tax post for further information. Meanwhile here is how to report in your return.
Treat your spouse as a resident alien for tax purposes. If you do this, you will need to include your spouse's worldwide income in your US tax return and it will be subject to US taxes.
To do this follow these steps.
1. Attach a statement to your tax return, signed by both spouses, that states that one spouse is a nonresident alien and the other is a U.S. citizen or resident alien, and you are choosing to both be treated as US residents for the tax year.
2. List the name, address and Social Security number (or Individual Taxpayer Identification number) of each spouse.
3. For the first year you make the choice, you have to file a joint return. In later years you can file joint or separate returns. Married Filing Jointly will give you a higher standard deduction and has other benefits that are not available using a married filing separately status, but you do have to include your spouse’s worldwide income in joint income.
@gur1
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