Deductions & credits

It depends.  A taxpayer is considered a resident for US tax purposes and files a US form 1040 if they meet the green card test or the substantial presence test.  The substantial presence test is: 

You must be physically present in the United States (U.S.) on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
   • All the days you were present in the current year, and
   • 1/3 of the days you were present in the first year before the current year, and
   • 1/6 of the days you were present in the second year before the current year.

Days counted as present in the US are generally days you are physically present in the US.  However you cannot count these days:

• Days you commute to work in the U.S. from a residence in Canada or Mexico if you regularly commute from Canada or Mexico.
• Days you are in the U.S. for less than 24 hours, when you are in transit between two places outside the United States.
• Days you are in the U.S. as a crew member of a foreign vessel.
• Days you are unable to leave the U.S. because of a medical condition that develops while you are in the United States.
• Days you are an exempt individual (see below).

Exempt individual

• An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.
• A teacher or trainee temporarily present in the U.S. under a "J" or "Q" visa, who substantially complies with the requirements of the visa.
• A student temporarily present in the U.S. under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa.
• A professional athlete temporarily in the U.S. to compete in a charitable sports event.

If he does not meet either of the tests then he files a 1040-NR for the US only income.

Click here for more information on the substantial presence test.

Click here for more information on nonresident filing.

An additional note.  If you haven't already you will need to file a business return.  It could be a partnership form 1065 or if you formed an S-Corporation, form 1120-S for the business entity.  There will be form K-1s generated from that business return that you each would use to file your personal tax returns.