@Opus 17 Thank you. To follow up on the thread below:
a) is the relative your parent (or your spouse's parent)? -- Yes, my Mother In Law.
b) does your relative pass the substantial presence test, which makes them a resident alien? -- Yes she does since she couldn't travel back due to COVID restrictions and exceeded 183 days with an extended visa.
The DCSA plan administrator has agreed to disburse the amount and asked us for the VISA number to be included in their form for disbursement. I plan to apply for an ITIN for my Mother In-law and also issue a W2 since the amount is over $2,200. Once I have the ITIN, I will contact the DCSA plan administrator and update the VISAnumber with the ITIN number.
My question is, what if in the process of applying for ITIN something goes wrong and the ITIN is not issued, then is there a way that I can return the money back to DCSA? or can I have it reported as taxable income via a Tax amendment and attach a cover letter explaining the circumstances? In short, once the money is disbursed from the DCSA account, can it be returned or filed as a taxable income?
