Filing Joint Taxes with a non resident Spouse

[dvallee40]

Hello,

In 2021 I made the following election “This letter is for us to declare an election that both of us choose to be treated as U.S. residents for the entire tax year for tax return purposes and to file the 1040 return jointly.  XXXXXX is a U.S. citizen, while xxxxxx (spouse) was not a U.S. resident on the last day of fiscal year 2021 within the meaning of IRC Section 7701(b)(1)(A)”

However, for 2022 I did not make any election.  My wife arrived in the U.S. in August 2021, we were married in October 2021 and applied for “Adjustment of Status” in early November 2021.   As of today (5/30/23), my wife is still waiting for her Green Card but as received a SSN back in September 2022.  My questions are as follows:

1. Did I file the correct election (IRC Section 7701(b)(1)(A) to file my tax return jointly with my spouse?  If not, what election should I have filed?  I ask cause I noticed there is another Joint Return Election (IRC 6013(g) and (h)) – so confusing???
2. Are there any other elections I should have filed in addition to the one I filed above?
3. Should I have filed the election again for 2022?  If yes, do I just send it in to the IRS or do I need to make some sort of amended return?
4. What will I need to do (i.e., cancel, suspend election, etc.) when my wife becomes a legal U.S. resident (gets Green Card).

I would greatly appreciate any assistance anyone in the TurboTax community can provide.

Regards

[pk]

@dvallee40 , first it is confusing indeed ( at least for the uninitiated and the rest of us ) and so don't feel bad.

Section 7701  generally is a definition section while section 6013 is  the defines actual eligibility, the election mechanism, the limits of such .

In your particular case ,  the letter requesting treatment of  non-resident alien  spouse  as a resident  i.e. the contents of such document is the only action required  --- there are some items / information/ assurances   etc.  that are  generally  needed within the body of the  request.  Once you have requested  ( and unless  IRS has specifically rejected )  you proceed  as if granted  -- your return was processed,  your refund issued etc. are general indication of granting.  The quotation of the  statute section  (  correctly or in error  ) does not generally affect the outcome ( unless of course you are arguing a determination ).

Once granted , the joint filing status  remains valid  unless  voided by situations/actions called out in section 6013 -- separation/ death  etc. etc.

Bottom line is don't worry about the request, assume it has been granted and is good  for as long as you choose to file together.

Assuming that you used   ( or requested  ) ITON for the Non-Resident spouse while filing jointly in 2021,  now that the spouse has SSN, use  that for the 2022 filing.  For tax year 2023, nothing changes  vis-a-vis  tax filing ( Married Filing Joint).

Does this help ?   Is there more I can do for you ?

pk

[dvallee40]

Hello PK,

Thanks for prompt response and detailed information.  Yes - this helps a lot.  I understood most of what you explained.  🙂   I did have one follow up question.

I electronically submitted my taxes for 2021 in October 2022 (filed extension so that wife could get SSN in time which she did - didn't want to paper file) and mailed in the election mentioned above separately .  Does this cause any issues bye itself.  With this said, I just received an IRS letter asking for clarification on what I sent (the election).  I suspect the IRS agent on my case didn't understand my election so I plan just replying with the following relating to the letter "My wife is not a U.S. Citizen and I want the election I made to in the record of my tax file".  Any thoughts? 

Regards

[pk]

@dvallee40   hello.

In your response to the IRS, you should include the following:

(a) Spouse  has been in the USA for at least 31 days  during 2021

(b) was not a resident during any part of 2020

(c) has been present for at least 75% of the days during a test period  admission date  ( enter actual date of entry to the USA ) and 12/31/2021.

(c) Spouse will be a resident  in 2022

(d) you filed your return after spouse meeting substantial presence test 

That should satisfy IRS requirements 

Is there more I can do for you?

pk

[dvallee40]

Hi PK,

Again - thanks so much for your reply. 

However, I think you may have confused me more.  In my original submission I used the guidance from the IRS link below. 

https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse

How to Make the Choice

Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following information:

1. A declaration that on the last day of the tax year one spouse was neither a U.S. citizen nor a U.S. resident within the meaning of IRC section 7701(b)(1)(A) and the other spouse was, and that you choose to be treated as U.S. residents for the entire tax year.
2. The name, address, and identification number of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.)

As such. I followed the guidance above and my original election I made was as follows:  This letter is for us to declare an election that both of us choose to be treated as U.S. residents for the entire tax year for tax return purposes and to file the 1040 return jointly.  XXXXXX is a U.S. citizen, while xxxxxx (spouse) was not a U.S. resident on the last day of fiscal year 2021 within the meaning of IRC Section 7701(b)(1)(A)”.  My wife and I then both signed the election, provided our address and SSNs.    

The guidance above does not say anything about using the "Substantial Preference Test". Maybe that for a different election choice?  I understood your first response as it appears that once I made my election in 2021 I was all set and did not have to make another election in 2022.  Since the IRS agent letter asked for clarification I assumed I just need to repeat what I initially sent as per the IRS guidance this would that be sufficient?  I am concerned by providing the additional suggested information related to the "Substantial Preference Test" this may infer that I made my original submission incorrect and now by providing the IRS with this new information I want to make an different election?  Plus, why should I have received a letter in the first place if i provided them with precisely what is required per the above IRS link.     

Also, since I filed my taxes electronically and mailed the election letter separately I wasn't sure if this caused any issues?  Meaning - am I required to mail them together?  

Oh - not sure of wife would meet the "substantial presence test" anyways since

c) She arrived on 8/6/21 and stayed through 12/31/22 - not sure if 75% applies to all of 2021.  

c) Spouse did not get Green card in 2002 (still waiting) so not resident for tax purposes

d) filed return on October 2022 - so not sure she was resident in 2022 for tax purposes.

The letter I received from the IRS was very boilerplate and states:

Please explain your problem in detail and send us any information you believe would be helpful such as copies of correspondence or notices relating to your situation.  

Sorry for all of this.  No need to reply if you are getting too frustrated with me.  

Regards

[pk]

@dvallee40  the list of items/ info to include is for exercising the first year  option and is essentially what your spouse is doing.

Thus the test period is the first after admission to the USA till the last day of the tax year-- you need to meet the 75% present  and at least 31 days in the tax year.  

The only difference here is that  being a spouse to a citizen/Resident allows the start date  to be  01/01/2021  in lieu of first day physically present for exercising the first year  option  ( i.e. no standard deduction available )

If   you do not want to answer those  stipulations then just explain to the IRS what you are trying to do  in response  to their questions and that is it.

Does that clarify  or do you need more supporting  evidence/ rules ?

pk