I moved to US from UK on Mar'17. working in US since Nov'17 on non-immigrant visa. Received UK income first 4 months of '17. How to declare the foreign income to IRS?

[godeban]

I moved to US on H4 visa on March 2017 and living here since. 

Earned UK income for Jan, Feb, Mar and Apr'17. UK tax paid on the income.

Received H1B visa status on Oct'17 and started working in US since Nov'17. received W2 for 2017.

Does turbo tax support dual-status aliens? I'm a resident alien on the last day of the tax year i.e. I'm in the US since Mar'17.

My wife(on H1B visa) was a resident alien for all of 2017. can I submit as "married filing jointly"?

[KarenJ · Accepted solution]

Turbo Tax does not support dual status returns.  However, since your wife was a resident alien for all of 2019 and you were a nonresident at the beginning of 2019 and a resident at the end of the year, you can make an election to file married filing jointly.  The election should be stated on a page attached to the tax return.  You will need to create this page outside of TurboTax and mail your federal return this year. Please see attached for more assistance

If you make this choice, the following rules apply. You and your spouse are treated as U.S. residents for the entire year for income tax purposes. You and your spouse are taxed on worldwide income. You and your spouse must file a joint return for the year of the choice.  You will need to declare all income earned in 2019, even the income you earned in  the UK.  However, you can use the UK taxes you paid or accrued on this income as foreign tax credit to offset any double taxation ( you will end up paying the higher tax amount).

Neither you nor your spouse can make this choice for any later tax year, even if you are separated, divorced, or remarried. 

Making the choice. You should attach a statement signed by both spouses to your joint return for the year of the choice. The statement must contain the following information. A declaration that you both qualify to make the choice and that you choose to be treated as U.S. residents for the entire tax year. The name, address, and taxpayer identification number (SSN or ITIN) of each spouse. (If one spouse died, include the name and address of the person who makes the choice for the deceased spouse).

Please see attached for more assistance Publication 519 US Tax Guide for Aliens

[Edited 03.18.20 | 3:38 pm]

[godeban]

Thank you TurboTaxKarenJ for the excellent and well rounded answer. Please clarify if I can use TurboTax to prepare my federal tax return or any, print it and prepare a paper declaration of the election/choice(choice to treat me as resident for the entire year) to file married filing jointly and post the package to IRS; or do all the paperwork manually outside TurboTax?

[KarenJ]

Yes, you can prepare your return in TurboTax and then manually attach the statement you create and mail the return.  The statement is called a 6013 h election.

[godeban]

Oh my. that will save a lot of time 🙂  thank you again TurboTaxKarenJ for the confirmation and quick response. much appreciated

[bine22]

Just be aware, that you will need to report your icome from before coming to the US as well if you file jointly.

[godeban]

thank you bine22, I have reported my foreign income and claimed foreign tax credit for it. my questions is do I have to send a copy of my UK payslips along with the US tax return document to IRS? if yes, the problem is I have only 2 of the 4 payslips. But I have the bank statement that shows the net Wage/Salary paid into it. will that bank statements be ok to send for the missing payslips?

[bine22]

no, you do not need to send your payslips. However, you should keep any documentation showing income in case the IRS requests it. Payslips would be good, bank statements are fine, however, if you claim the foreign tax credit, you should also have some documents showing the taxes you paid (can be your UK tax return)

[godeban]

Thank you for the prompt reply. I got the UK tax documents showing taxes paid. my federal tax return is complete.

now state tax return pending. In state return, TurboTax keeps adding my foreign income during auto review stage even when I manually delete it. How to override it? my situation as described earlier UK income earned in first 4 months of 2017, I moved to WA state in Mar and lived(without job) there till Oct'17. Moved to PA state in Nov'17 for new job and living here since. Do I have to declare the foreign income in PA state tax return? if not how to remove it /stop TurboTax from bringing in the values from Federal forms 1099MISC

[godeban]

to be accurate I moved on Nov 26 2017 to PA from WA, that means less than 183 days in the state if counted till Dec 31 2017

[godeban]

ok rather than asking how to manipulate the TurboTax software my questions is how to handle my foreign income situation in PA state tax return? if the foreign income is included then I have state tax due close to $1000. not sure whether to include/exclude

[godeban]

I contacted PA department of revenue and clarified by situation. I'm told to not include/report foreign income as I was not a resident of PA at the time of earnings and there is no state tax for WA(prior state of residence). Skipped TT state tax instead used the PA free e-file option and filed my PA state tax return. Also Fed tax return via TT is ready for mail/post. Thank you TT support team and others for your answers. happy returns.