Foreign Income from foreign spouse

[kaipo]

Hi,

Last year, I married to my foreign spouse. She still works and lives in her home country while waiting for GC process. If I file tax as married jointly, I understand that I have to report her worldwide income. In turbo tax, I see that it is possible for a nonresident alien spouse of a U.S. citizen to be treated as an a U.S. resident alien. So if this is true, it meant she might be qualified for the Foreign Tax Income Exclusion right?

If the answer is yes, here is the next question, last year she came visit and stay with me from 04/2023 to 06/2023 for 3 months. In order to qualify for the FEIE and pass the substantial presence test. They say it can any 12 month periods that begins or ends during the tax year. So if I start from 07/2023 to 07/2024 would this be qualify assuming she stays in her home country the whole time during that period excepts 2 weeks for a vacation in another country.

Thanks 

[DavidD66]

No. To be eligible for the foreign earned income exclusion, you must have a tax home in a foreign country and be a U.S. citizen or resident alien.  If you treat your non-resident alien spouse as resident alien for tax purposes, you MUST include your spouse's worldwide income in your US tax and it will be subject to US taxes.  You cannot treat her as a resident alien and then exclude her income under the Foreign Earned Income Exclusion.  

[kaipo]

@DavidD66  So if I treat her as a resident alien and include her worldwide income in my US tax, I cannot exclude her income under the FEIE? She also paid taxes in her home country too

[DaveF1006]

Yes, this is correct. You cannot exclude her income under the FEIE because she is not a citizen or resident alien. She is only treated as a resident alien for tax purposes, which is not the same thing. 

She is not eligible to claim a foreign tax credit unless she receives effectively connected income, which is income that is effectively connected with the conduct of a U.S. trade or business.

Non Resident Alien-Figuring Your Tax