6013(g) election in the context of DC taxes / foreign earned income exclusion v. foreign tax credit

[dctaxpayer1]

I am a US citizen and just got married to a non-US citizen in the US on a G-4 visa. My spouse is exempt from paying tax in the US on the income she receives from the international organization she works for. We are thinking of making the 6013(g) election to file jointly.

*Question*: Are we able to file as 'married, filing jointly' for the purpose of DC taxes, as well? How would I file my DC taxes if we were not able to make the 6013(g) election for our DC taxes?

Assuming we were going to file jointly, my spouse has a small amount of income from an investment in another country. I understand that this income would be subject to US tax.

*Question 2*: Would we want to take advantage of the Foreign Earned Income Exclusion (FEIE) or the foreign tax credit? How would this income be treated for DC tax purposes?

[DaveF1006]

In referencing the DC state tax laws, if the federal return allows a non-resident wife to be a resident for tax purposes, then this will be allowed. If for any reason DC doesn't accept this, it is possible to file married Filing jointly on the federal return and Married Filing Separate on the DC return.

She would not be able to claim the FEIE for investment income. This is strictly for an exclusion for income earned for working in another country and being physically present in that country. Passive income from investments does not qualify for this exclusion. 

Prepare your return in TurboTax and select Married Filing Jointly as your filing options.

1. When you get to the Let’s get ready to e-file screen, select File by Mail.
2. Attach a statement to your return, signed by each of you that states that one of you is a U.S. citizen and the other is a nonresident alien and that you’re electing to both be treated as U.S. residents for tax purposes. Include the full name, address and Social Security number (or Individual Taxpayer Identification Number) of each spouse. This won’t affect the immigration status of the nonresident alien.
3. Mail the return to the address on the instruction sheet that prints with the return.

If your spouse doesn’t have a Social Security number or ITIN, you’ll need to apply for one when you mail in your return. To do this, follow steps 1–3 above and then do this:

1. Fill out Form W-7 and attach it to your return, as well as all necessary documentation. Click on the link to download a pdf copy to fill out and attach to your return.
2. Mail the return to the address specified in the Form W-7 instructions.

Note: TurboTax will give you an error regarding the missing Social Security number for your spouse but ignore this error because you are mailing the return.
 

To file separately

1. Prepare your return in TurboTax.
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.