Thanks, @DaveF1006
She is working in CANADA on a work permit and is not a permanent resident. She files taxes in CANADA as a resident. Given this information when filing USA taxes if we file join tax and consider her as a resident alien because I am resident
Which below option is applicable? I am confused as the IRS website(https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse) says "Generally, neither you nor your spouse can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect. However, the exception to the saving clause of a tax treaty might allow a tax treaty benefit on certain specified income"
Option 1
Does she get a tax credit for taxes paid in CANADA based on the tax treaty?
Option 2
She can't get a tax credit and she has to pay tax again on CANADIAN income while filing USA tax
If Option 2 is applicable then will it make more sense that I file married filing separately as resident Alien and for my wife file federal tax as non resident Ailein to report income of around $200 on bank interest rate?
