Can I make First Year Choice and be the Resident Alien for my spouse to claim "Nonresident Spouse Treated as a Resident"?

[ckwangt]

I'm married and just turned from F1 to H1B in Oct 2019. If I made my First Year Choice, I would be considered as Resident Alien at the end of 2019. Based on that, could we elect "Nonresident Spouse Treated as a Resident" and file MFJ over the whole year 2019? Could we claim the standard deduction?

I saw that the description in Publication 519 says "If, at the end of your tax year, you are married
and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident." and "If you make this choice, you and your
spouse are treated for income tax purposes as residents for your entire tax year."

[KarenJ2 · Accepted solution]

Yes, you can do that!!

You cannot mail your 2019 married filing jointly tax return until you have met the substantial presence test for 2020.

Also, you must attach the First Year Choice election to your tax return page 8 of Publication 519 as well as the Nonresident Spouse Treated as a Resident statement on page 9 of Publication 519.  You will have to mail your return.

When you calculate the Substantial Presence Test. you must calculate it as follows;

Count all the days of 2020 that you were in the US, count 1/3 of the days you were in the US in 2019 and count 1/6 of the days you were in the US in 2018.  If the days add up to 183 US days or more, then you are a US resident for tax purposes in 2020..   

(And with the First Year Election, you become part year resident in 2019 and with the Nonresident Spouse election you become full year residents in 2019.

Make sure you count the days in 2020 correctly as you cannot file your tax return until you have met the 183 days.

[Rajshree7]

Hi, we are in a similar situation and the reply was very helpful. Could you find any reliable tax consultant who can help with this filing or you are planning to file on your own? 

Currently extension form to be filled by both. So how are you planning to do that?

[KurtL1]

Per @KarenJ2 you need to count your days present in the U.S. per the Substantial Presence Test. What was not told to you is that when you are here on a F-1 Visa, you cannot count the days present in the United States for part of 5 calendar years. If you came into the United States in 2014 or before, you would be considered a Resident Alien for 2019. 

You are not able to start counting the days present for the Substantial Presence Test until you obtained your H1B Visa

If you came into the U.S. after 2017 you will need file a Form 1040-NR in 2019. TurboTax does not support Form 1040 NR or Dual-Status returns. You will need to use Sprintax to file a Form 1040-NR and the Dual-Status return. If you have questions you can contact Sprintax Help for assistance.

If you did come into the U.S. in 2014 you can file as a Resident Alien in 2019 and file a Form 1040. To make the election to treat a nonresident spouse as a resident alien see IRS Publication 519 page 9 to see what is required on the statement that you need to mail with your return.

Edited 02/24/2020

[Rajshree7]

I am a non resident alien on F1 and my spouse is dual status alien F1 to H1 beginning Oct 1 2019. If we make the First year choice and consider me a Non-resident spouse as a resident, so we both will be considered as Resident Aliens for the entire year. Me, the non resident alien spouse will still be considered non resident for FICA, Medicare and SSN taxes (First point https://www.irs.gov/individuals/international-taxpayers/nonresi[product key removed]e). Do my spouse have to pay FICA, Medicare and SSN taxes for the whole year beginning Jan 1 as we will be considered resident aliens for the whole year?

[KarenJ2]

Please make sure you carefully follow the information in Publication 519 for the First Year Choice and the Nonresident Spouse Treated as a Resident on pages 7-9.

FICA taxes are not income taxes and are outside of our scope of services. I suggest you research your FICA questions on the IRS website.

[naran79]

Hey @Rajshree7 

I'm on the same boat. Came to US in 2016 as F1 and I got H1B on Oct 01, 2019 and my wife has F1, OPT. We both have SSN and want to file Joint, I can wait till May by filling extension. My questions are 

1. Do I need to file extension as married or separately?

2. Do I need to pay FICA and Medicare for Jan to Sep 2019?

Let me know, what info you gather. 

Thanks!

Narayan

[ckwangt]

@Rajshree7 , @naran79 :

As what I know:

1. We need to file an extension now and wait until we passed the SPT (from 2019/10/01 till the date, around May/June 2020)  to file the 2019 tax return.
2. We should attached papers of announcement about electing "First Year Choice" and "NRA spouse treated as RA" with the tax return filing.
3. No need to pay Medicare and FICA before 2019/10/01, according to this post: https://ttlc.intuit.com/community/taxes/discussion/what-is-the-procedure-for-opting-for-the-first-ye...

Please let me know if I understand something incorrectly.

[Rajshree7]

@ckwangt @naran79 

As mentioned in that answer @ckwangt  mentioned and guidelines for  Non Resident Alien Spouse , the non-resident alien spouse on F1 or H4 is exempt from Medicare and SSN as follows,

'for Social Security and Medicare tax withholding purposes, the nonresident alien may still be treated as a nonresident alien'. 

But guidelines for Alien Employees in the U.S. - Social Security Taxes mentions that,

'The exemption does not apply to nonimmigrants in F-1, J-1, M-1, or Q-1/Q-2 status who become resident aliens for tax purposes'.

So my interpretation says, the spouse on H1 will become resident and have to pay Medicare and SSN for whole year. I still need expert advice on this. This answer mentions 'FICA taxes are just between you, employer and govt, meaning employer takes definite amount from your paycheck and send to govt. If they didnt withhold in your case thats correct. You dont need to worry about it.' So its quite confusing.

In my case, if my spouse on H1 has to pay these FICA taxes from Jan 1  to Sep 30, there is no benefit in filing jointly. It would be better to file separately as Non-residents in that case.

[naran79]

@Rajshree7 , @ckwangt 

Thank you very much for this information.

In my case, there is still significant difference, if only one has to pay full year FICA and Medicare.

If you got expert opinion on it don't forget to share.

Thanks!

[KarenJ2]

From one of my fellow tax experts:

Elections to be treated as a Resident do not affect being subject to FICA, so there would not any retroactive FICA owed.  You must become a Resident on your own to fall out of the FICA exemption.

So it should not affect your FICA.

[naran79]

That means, only have to pay FICA for the part of the year and thereafter whenever you changed to H1 or become resident.

Correct me if I'm wrong.

Thanks! 

[KarenJ2]

Yes, you would need to pay FICA when your visa changed and you were no longer on an F visa.   This is according to my colleague.  

From the IRS Nonresident Spouse

Election to File Joint Return

If you make this choice, the following rules apply:

• You and your spouse are treated, for federal income tax purposes, as U.S residents for all tax years that the choice is in effect. However, for Social Security and Medicare tax withholding purposes, the nonresident alien may still be treated as a nonresident alien. Refer to Aliens Employed in the U.S. – Social Security Taxes.

[Tronghieu1987]

My H1-B visa also started on October 2019 (OPT before that), but my employer did not withhold any amount for FICA towards the end of the year 2019. I am, along with my wife, going to opt to be treated as RA for the whole 2019. 

So does this mean I need to request my employer to make adjustment and correct form W-2 so that FICA is withheld from October-December 2019?

 Thank you!

[wwdd2022]

@Tronghieu1987

@KarenJ2 

@naran79 

I have same situation as yours,  2021 Jan- Sept, F1; 2021 Oct-Dec, H1B. Married, spouse F1. The employer didn't withhold FICA for the entire 2021.

Plan to choose First Year Choice for 2021, do it need to contact employer to pay FICA for the entire 2021? 

Do you figure out a solution for your case please?