US citizen married to foreign diplomat… file jointly, separately, and/or as head of household?

[marley77]

My spouse is a non-US citizen, foreign diplomat on an A-1 visa and posted to the Embassy of his country in the US.  As such, he is exempt from all US taxes and does not file a tax return in the US.  (He files in his native country, where his income in that currency is taxed accordingly.)   Since he has no income in the US, he does not have an SSN or ITIN. 

I am a native US citizen, work for a US entity, have an SSN, and dutifully file each year.  Neither my spouse nor I have plans to pursue dual citizenship in the others’ nationality.  We have one child, who retains dual citizenship, one nationality from each of his parents.  We reside in the US.

Since we married in 2022, this is our first ‘family’ tax return.  Do I now file as married filing jointly, separately, and/or as head of household since my income covers more than 50% of our family expenses?  Can/shoudl I declare him as a dependent along with our child?

[pk]

@marley77 , as far as filing status goes , because you are married to a Non-Resident Alien and have a child , you generally have three options:

(a) you file as Married Filing Separate --- you declare your husband as NRA ( TurboTax may stop you from e-filing because  you have to provide  spouse's tax id  ( and he has none, requiring to you to use dummy SSN to satisfy TubroTax and then print, replace dummy SSN/TIN with  "N R A ", sign , date and mail in.

(b) you file as Head of Household, using your  child as qualified child  and still declare your  spouse as  NRA --- TubroTax may give you trouble because  you have to be considered unmarried    and you pretty much have to agree that you are considered unmarried   because your  spouse is NRA .

(c) you file as married  filing joint but  your spouse agrees to be treated as a US resident, source  his salary  as foreign sourced  --  an embassy of a foreign nation is sovereign territory of that country and that country is paying the salary and therefore can use the foreign tax credit to ameliorate the effects of  double taxation.  And if that country has  totalization agreement with USA  then also does not have to pay  FICA   ( Social Security and medicare  at 15.3 % of gross salary  ).

That is general info.  If you want more details , then please tell me the country he is from and  the country he works for.

I will circle back once I hear from you

pk

[marley77]

Thanks, PK!

Country is Canada -- so Canadian citizen and working for the Government of Canada on a dip posting to the US in the US.    (We all live in the US -- so is he still a non-resident alient?). Also, can I file as Head of Household and Married Filing Separately?  I guess I thought it was one or the other?  

[DaveF1006]

According to the green card test, your spouse is a resident, for U.S. federal tax purposes, if you are a lawful permanent resident of the United States at any time during the calendar year. 

Furthermore,  a permanent lawful resident is defined by the Department of Homeland Security as follows, "You are a resident, for U.S. federal tax purposes, if you are a lawful permanent resident of the United States at any time during the calendar year".

The IRS source hyperlinked at the top also states that You continue to have U.S. resident status, under this test, unless:

• You voluntarily renounce and abandon this status in writing to the USCIS,
• Your immigrant status is administratively terminated by the USCIS, or
• Your immigrant status is judicially terminated by a U.S. federal court.

In answer to your question, your best option is to file Married filing jointly and report all worldwide income for both of you. You can claim a foreign tax credit for the amount of foreign taxes he paid to the Canadian Government on his Canadian income.

@marley77 

[marley77]

Thanks, DaveF006!

THe snag is that spouse does not have a US SSN or ITIN, so we can't file jointly.  Is there away to file jointly without him having an SSN or ITIN?

[DaveF1006]

There is but you could not file electronically.  Here are a couple of options that can be done.

To file jointly prepare your return Married Filing Jointly and then:

1. Attach a statement to your tax return, signed by both spouses, that states that one spouse is a nonresident alien and the other is a U.S. citizen or resident, and you are choosing to both be treated as US residents for the tax year.
2. List the name, address and Social Security number (or Individual Taxpayer Identification number) of each spouse.  You will need to complete a Form W-7, Application for IRS Individual Taxpayer Identification Number (ITIN) ( http://www.irs.gov/pub/irs-pdf/fw7.pdf).  This form will be attached to your tax return.  Turbo Tax does not support the Form W-7.  You can complete it outside of Turbo Tax.  You will have to print, sign and mail your return in if you are using Form W-7. If you haven't received an ITIN or Social Security number prior to filing, leave the Social Security number blank and you will need to file this return by mail.
3.  For the first year you make the choice, you have to file a joint return. In later years you can file joint or separate returns. Married Filing Jointly will give you a higher standard deduction and has other benefits that are not available using a married filing separately status, but you do have to include your spouse’s worldwide income in joint income.

You can also file Married Filing Separate by:

1. Prepare your return in TurboTax by choosing the option as Married Filing Separately.
2. When you get to the Let’s get ready to e-file screen, select File by Mail.
3. TurboTax will give you an error regarding the missing Social Security number or ITIN for your spouse. Proceed to print with the error, but write Nonresident Alien or NRA in the space for your spouse’s Social Security number before mailing in your return.
4. Mail the return to the address on the instruction sheet that prints with the return.

Declaring your spouse as a dependent is rarely an option unless the spouse doesn't work and is completely dependent on your income.    

@marley77