Dual Status Alien F1 OPT to H1B Married Filing Jointly

[rajshah0112]

Hi, Please read the situation below and advise how to file 2019 tax return. In 2019 my visa status got changed from F-1 OPT to H1B. And, we're in process of visa change for spouse (F1 to H4 Dependent).

• F1 Visa - 06/17/2016-09/30/2019 (1200 Calendar Days / 3 yrs+3month+13days)
• H1B Visa - 10/01/2019-12/31/2019 (91 Calendar Days)

Publication 519 Link: https://www.irs.gov/pub/irs-pdf/p519.pdf 

Step 1: Substantial Presence Test Calculation: Refer Page 4 of Publication 519

1/6*0 days (2018) + 1/3*90 days (2019) + 153 days (2020) = 183 days

Result: I'll pass the test on June 2nd, 2020. Correct? 

Step 2: DUAL STATUS ALIEN - Refer Page 7 of  Publication 519

Step 3: FIRST YEAR CHOICE - Refer Page 7 of  Publication 519

As I'll be able to pass the substantial test in 2020 and not in 2019, I'll have to opt in for "FIRST YEAR CHOICE" in a way to consider my self as resident alien for a part of 2019 year. Correct?

Step 4: NONRESIDENT SPOUSE TREATED AS RESIDENT - Refer Page 9 of Publication 519

As I'm married with Non resident alien and trying to file married filling jointly - I would have to opt in for "NONRESIDENT SPOUSE TREATED AS RESIDENT" so that I and my spouse can be considered as resident alien for whole year. Correct? 

Due to current circumstances - COVID 19, IRS has automatically extended the deadline to July 15, 2020 such that I'm not planning to file the tax extension rather I'll file it once pass the substantial presence test - June 2nd, 2020. Correct? 

I'm also planning to file ITIN application with 2019 tax return for spouse so I can claim her as dependent. Correct? 

Conclusion - I'll be able to do Married filing jointly return using 1040 form by making the choice for - Dual Status Alien+First Year Choice+Nonresident spouse treated as resident.  Correct? 

Please advise. Thank you and appreciate you for taking time.

[KarenJ2 · Accepted solution]

Yes, you are correct.  So you will have 2 statements attached to your return, First Year Choice and Election to File Married Filing Jointly. 

Once you have met the Substantial Presence Test in 2020, do not mail your return and W-7 application and documents.

Instead you need to find a TAC and make an appointment.  Bring your return and statements and W-7 and documents.  

You can apply for your ITIN by visiting designated IRS Taxpayer Assistance Centers (TACs). They can verify original documentation and certified copies of the documentation from the issuing agency for primary and secondary applicants and their dependents. For dependents, TACs can verify passports, national identification cards, and birth certificates. These documents will be returned to you immediately. Service at TACs is by appointment only. Appointments can be scheduled by calling 844-545-5640. See IRS.gov/W7DocumentVerification for a list of designated TACs that offer ITIN document authentication service. TACs that don’t offer ITIN document authentication service will mail the original documents, Form W-7, and the tax return to the IRS Austin Service Center for processing.

FYI, Your spouse can never be your dependent.  

[moali]

Hi @KarenJ2,

I am in an almost identical situation and noticed you assumed the spouse can make the choice to be treated as a resident alien (first year choice) even though her change of status from F2 to H4 is still being processed. Should not both spouses meet the the test for first year choice?

For example: If my status changes from F1 to H1B on October 1st, 2021 and my spouse status changes from F2 to H4 on December 20, 2021 (H4 change of status takes more time). Can we still use the rules for "First-Year Choice" and "Choosing Resident Status for Dual Status Aliens" to file our taxes jointly and be treated as tax residents for the entire year after meeting SPT in 2022?

Thanks!

[DanielV01]

It appears so, @moali.  Here is the direct quote from Publication 519: 

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. This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year.

As KarenJ2 points out above, you will be able to make the same election for 2021 as was referred to into the first post.