First year choice

[HappyBen]

I was working in US for full year of 2022. My wife and kids joined me in middle of August-2022 from abroad. I opt for first year choice for my wife and kids to file the tax return jointly when they reach substantial presence test. 

what app shall i use for the purpose? it looks turbotax online does not support the function?

[DMarkM1]

TurboTax supports the tax form completion, but you will not be able to e-file.  You will need to print/mail the return to include the mandatory statement as shown below.  You spouse and dependents will need either social security numbers or Individual Taxpayer Identification numbers (ITIN) on your tax forms.  See the section on "Social Security Numbers" in this link.  There is a link contained therein for ITIN applications as well.

Keep in mind:  

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 spouse may still be treated as a nonresident. Refer to Individuals Employed in the U.S. – Social Security Taxes .
• You must file a joint income tax return for the year you make the choice (but you and your spouse can file joint or separate returns in later years).
• Each spouse must report their entire worldwide income for the year you make the choice and for all later years unless the choice is ended or suspended.
• Generally, neither you nor your spouse can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect. However, the exception to the saving clause of a tax treaty might allow a tax treaty benefit on certain specified income.

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.)

[HappyBen]

thanks for your reply

for your information, i have only one wife, who and my kids came to US in 2022-Aug.

as i learning from IRS, my wife and kids could be counted as residence aliens from the date of arriving at US if they choose first year choice. from Turbotax tools, there is no items to input beginning dates.

can you please give more explanation as per information amended?

[DMarkM1]

Since you meet the substantial presence test and are considered a resident no one needs to make a first-year choice.  Instead you will file a joint return and include the statement that you are making the election to treat your nonresident spouse as a resident.  

I included the statement in my earlier post.  Click here to see the reference (see below) and the statement (see below).  You will not be able to e-file but instead print/mail your return with the statement attached. 

"If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a U.S. resident within the meaning of Internal Revenue Code (IRC) section 7701(b)(1)(A) and the other is not, you can choose to treat the nonresident spouse as a U.S. resident for tax purposes. This includes situations in which one of you was not a U.S. resident at the beginning of the tax year but was at the end of the year, and the other was not a U.S. resident at the end of the year."

"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.)"

[HappyBen]

Thanking  for your detailed explanation, it is now understood that the rule regarding non-resident aliens being treated as resident aliens through their resident alien spouse applies, and therefore worldwide income must be reported. However, if there were no W-2 forms available in the foreign country, it raises the question of what other documents would be accepted as proof of foreign country income.

To avoid such documentation issues altogether, whether it's possible to file a tax return jointly with the non-resident alien spouse before their entry and as a resident alien by first year choice after their entry?

If not, can I choose married and file separately? In such case, she should be considered as non residence alien, right?  If she does not have any US income , can filing tax return be waived in such situation?

[DMarkM1]

Yes. Your understanding is correct. You can file as married filing separately and since your spouse does not have US income and is nonresident alien she would not need to file a US tax return. Next year you could file a joint return.

Further, the better option may be for you to file as head of household since you have dependents.  Here is a link with more information.   

Any dependents you list on your return need either a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).  NOTE: If you file as married filing separately the same rule applies to your spouse.  Here is a link for reference. 

Finally, here is a link with information on applying for SSN or ITIN.  You will need to do so for either your spouse or your dependents depending on your filing status.