Filing married - foreign non-resident spouse

[rob_taxes_ttax]

Hello,

Similar questions have been asked but I am asking for the details of my situation and for the current tax return year. I would like advice about how to file my taxes this year. I am married but my wife does not have citizenship or a green card yet. She lives in Mexico and has applied for a greencard and is waiting to get an interview. She currently doesn't make any income and hasn't made any income that would be taxed in the U.S this year or previously.

My question is how should I file and any things I should know when completing my return. I read in similar posts that it is recommended to file married but separately and mail in the completed forms instead of e-filing. I'm wondering what options there are and what would be recommended. Thank you kindly for your help.

[LinaJ2020]

Does she have a Social security number or an ITIN?

[rob_taxes_ttax]

No

[LinaJ2020 · Accepted solution]

You have two options. 

If you want to file jointly, you would need to make an election to claim your nonresident spouse as a resident.  Click here Nonresident to resident  You are required to report worldwide income from both of you and your spouse.  Without your spouse's SSN or ITIN, you won't be able to e-file, unfortunately.  IRS requires everyone on the tax return have either SSN or ITIN on the tax return.  You might want to apply for an ITIN.  In that case, you will have to file a Form W-7 for the ITIN and your taxes simultaneously with TurboTax program:

-In the program, as you enter the information, leave the SSN space blank

-After entering all your information, print out returns and required forms ( write APPLIED in the SSN space) 

-As TurboTax does not support the Form W-7, fill out the forms by following

 https://www.irs.gov/Individuals/General-ITIN-Information and attach to other required  documentation

-Submit everything including your tax forms to IRS Austin location in Texas.  ( Form W-7 instructions)

Or you can file Married Filing Separately.  You only need to report your own information and share of income ( Your spouse remains as a nonresident).  You would not need to apply for ITIN for your spouse.  But you will not able to e-file either.  You can still use the program to prepare the tax forms but will have to submit by mail.  

To file separately without the SSN or ITIN: 

• In the program, leave the SSN space blank
• After completing the return, print out the forms.  Write “NRA” in the spouse's SSN space. ( NRA stands for Nonresident Alien). Do not leave the space blank. 
• Submit all the forms and required documents to IRS based on the instructions on your print-out.

To see the advantages and disadvantages of MFJ and MFS, click here: MFJ vs MFS

If you want to see the difference in result between the two filing statuses, I would suggest you use the desktop version instead of the online.  The desktop version allows you a feature for comparison.  Click here: Comparisons

[rob_taxes_ttax]

Do you think it is too late to apply for an ITIN? If I can't get an ITIN in time then I should file separately?

Thanks again, Robert

[LeonardS]

No, you cannot file separately because your spouse would need a social security number or an ITIN to file their return.

However, you can file Form W-7, Application for IRS Individual Taxpayer Identification Number (ITIN), with your federal income tax return. .." 

You will mail your W-7, tax return, proof of identity, and foreign status documents to:

Internal Revenue Service

Austin Service Center

ITIN Operation

P.O. Box 149342

Austin, TX 78714-9342

Ref: IRS,  How do I apply for an ITIN?

[pkpatel337]

Hello, I have a question regarding ITIN. My spouse is in the process of getting her visa through Greencard for the US. So is it right to apply for ITIN as it says when I was in the process to fill the W7 form. It said " Don’t submit this form if you have, or are eligible to get, a U.S. social sec. Purity number (SSN). "  Please help 

[DawnC]

The Individual Tax Identification Number, or ITIN, allows taxpayers who don't have a Social Security Number (SSN) to file income tax returns. Unlike other forms of ID, ITINs only have one purpose—tax filing and reporting. Having an ITIN number won't make you eligible for benefits, such as Social Security or earned income credits that provide refunds to some low-income filers.

The ITIN is a nine-digit number that's formatted similarly to an SSN. To apply for an ITIN, you must complete IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. This single-page application will require your:

• Name and birth name, if different
• Birthdate and birthplace
• Identification documents to accompany the application, such as a passport, driver's license or state-issued ID
• Foreign status or immigration documents in original form or certified copies

If you’ve used an ITIN in the past, you must provide the prior identification number on your application.

Application Process

For most taxpayers, the due date to file an income tax return in 2020 is mid-July. Submitting an application past the tax due date may result in interest or penalties, so apply for an ITIN either before your income tax return is due or at the time of filing.

You should expect to hear back from the IRS about your approval status after no more than seven weeks — look for a letter in the mail with your ITIN when your application is approved.

Double-check your application for missing pieces of information or errors before you submit it, as applications that are incomplete (for example, lacking proper identification or immigration documents) can take longer than seven weeks to process. If seven weeks go by and you haven’t received a response, you can check the status of your ITIN application by calling the IRS toll-free at 800-829-1040.

Other options for applying for an ITIN:

• • Apply by mail at: Internal Revenue Service, Austin Service Center, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342
  • Apply in-person at a Certified Acceptance Agency or Taxpayer Acceptance Center

Please see Lina and Leonard's replies above for more information.  @pkpatel337

[juliananyc]

Hi there!
Thank you for the info shared. I have a question regarding what to do when the foreign non-resident spouse had income and there is a treaty (Germany).  Should I say that he met the physical presence test?

[SusanY1]

If there is a treaty that covers the income, you must file Form 8833 to claim the benefits under the treaty and outline which provision of the treaty covers the income.  This form is not supported in TurboTax. Also, Tax treaty provisions apply to residents and citizens but generally do not apply to nonresidents making an election to be treated as a resident. 

However, income of a nonresident alien spouse can only be excluded from the U.S. resident's return by filing using the Married Filing Separately status.  If electing to treat a nonresident as a resident for tax purposes, all income of the nonresident alien must be included on the return. 

While making this optional election requires all income of the nonresident making the election to be included, you may take a credit for any foreign taxes paid on the same income. 

[Gridder406]

I am in a similar situation. 

Last year, I got guidance to fill out a Form 8840 "Closer Connection Exception Statement for Aliens" because I was filing as "married but separately".  My wife had spent 46 days (over the 31 days for the substantial presence test).   She spent 0 days in the US in 2020 due to COVID-19 restrictions with the UK.

Also, in 2020 we have started the immigration process and Form 8840 on line 6 says "You are not eligible for the closer connection exception. However, you may qualify for nonresident status by reason of a treaty. See Pub. 519 for details. If so, file Form 8833 with your Form 1040-NR".

Since my wife did not work in the US and never even visited in 2020 due to COVID restrictions with the United Kingdom, does she need to fill out Form 8840?

Do I need to file a Form 1040-NR with Form 8833?  I had read that Tax Treaties only apply to residents and citizens...which she is neither.

Thanks!!

[ReneeM7122]

It depends.

The closer connection exception for Form 8840 depends on other factors besides substantial presence.  

You cannot claim you have a closer connection to a foreign country if either of the following applies:

• You personally applied, or took other steps during the year, to change your status to that of a Lawful Permanent Resident, or
• You had an application pending for adjustment of status to Lawful Permanent Resident during the year.

If you filed any of the following forms during or before the year in question, this indicates your intent to become a Lawful Permanent Resident of the United States and that you are not eligible for the Closer Connection Exception.

• Form I-508, Waiver of Rights, Privileges, Exemptions and Immunities
• Form I-485, Application to Register Permanent Residence or Adjust Status
• Form I-130, Petition for Alien Relative
• Form I-140, Immigrant Petition for Alien Worker
• Form ETA-750, Application for Alien Employment Certification
• Form OF-230, Application for Immigrant Visa and Alien Registration

If your wife falls into any of these categories, she should not complete Form 8840.

Regarding 1040NR, she does not need to file it.  You can file a joint return if she has an ITIN.

@Gridder406