How to File If My Wife Was on a J1 Visa Part of Last Year and H1B Part of the Year

[Budi1782]

Here is my scenario, and I'm unsure of what to do. 

I'm a US Citizen, and my wife is a French national who has been in the US since August 2017. We married in October of 2022. She has been filing her taxes as a non-resident in 2017-2021 while on her J1 Visa. Last year, her J1 expired in late June and she was granted an H1B visa in early August. Because she has been in the US more than 5 years, and last year was granted the H1B, can I file our taxes jointly with TurboTax and consider her a resident alien for the whole year? Or will she need to file part of the year with me from August - December and then January - July as a non-resident? 

[Anonymous_]

Stay tuned. I will page Champ @pk.

[RalphH1]

You can definitely file one joint 1040 return! (The rules actually encourage it, with exceptions you can take advantage of even if you're not officially required to do it that way…)

The IRS starts counting days of presence in the U.S. on the first day of presence during the calendar year in which the taxpayer meets the “substantial presence test.” (That test is discussed here. Also see example 4 here, of a J1 Visa holder with slightly different circumstances, but still relevant.)

In your wife’s case, the five J1 years were the maximum before meeting the test anyway, so she would have satisfied it even without becoming a H1B. But more importantly (and what you were really concerned about), the earlier days from that year of meeting the test when the taxpayer was an “exempt individual” are no longer considered “exempt” for the purposes of the test. So she’s now a U.S. resident for tax purposes for all of 2022, and required to file accordingly (either jointly with you or separately, but no more 1040NR).

I hope that helps. Thanks Budi1782!

[pk]

@Budi1782 , to be sure I understand your situation, let me enunciate my understanding of the situation and only for the tax year 2022:

(a) You a US person  ( citizen ), married a foreign person  ( Non-Resident Alien ) in Oct. 2022

(b) Spouse is a French Citizen,  had a status adjustment in October of 2022 ( has filed  1040-NR ) to H-1B. Prior she was an exempt  ( are you sure of this ? ) person and so days present count starts from Oct. XX , 2022. Thus  the spouse does no meet the Substantial Presence Test  ( SPT ) for the tax year 2022.

(c) Assume spouse did not have any foreign income during 2022

(d) You and your spouse both wish to file jointly for 2022

Generally, since the spouse has not met the SPT , joint filing is not allowed and spouse must file as a Non-Resident Alien on form 1040-NR for tax year 2022.

However, since spouse is married to US person ( Citizen/ Resident ) , spouses can  indeed request that the NRA spouse be treated as Resident Alien ( for Tax Purposes ) for the Year 2022.  The need to attach a request signed by both spouses makes e-filing in-feasible and therefore  there may be processing delays encountered.  This topic is covered herein ( instead of my paraphrasing the info  ) -->

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

Does this help, make sense  and is there more I can do for you ?

pk

[Budi1782]

@pk 

What you are describing mostly is correct. For part b), she had her visa updated in August of 2022 to H1B from J1. The J1 was from August 2017 - June 2022. She had extensions on it because of Covid. 

c) Yes she has no foreign income, only her teacher wages in the US. 

Her first 2 years I believe (I need to clarify from her) were filed where she did not pay any taxes in the US. The last 3 years, she did pay taxes, so I'd assume that makes her a resident alien? Also, she has been in the country the last 5 years pretty much all year long, with only maybe 30-45 days out of the country per year for work (teacher) and travel back home. 

Because of this, shouldn't she have met the SPT based on her time here, even if under the J1 and not H1B?

If this isn't the case, thank you for the link, I will make sure to file with the attached request and mailing in our forms rather than e-filing. 

[ShirlynW]

Yes. You can file your taxes jointly with TurboTax and consider your wife a resident alien. Generally, an alien in H-1B status will be treated as a U.S. resident for federal income tax purposed if he or she meets the Substantial Presence Test.

To file you tax returns using TurboTax:

• Login into your TurboTax account
• Enter your personal information
• A screen will appear asking to confirm your marital status
• Select married
• On the next screen you will enter your spouse’s information
   

[pk · Accepted solution]

@Budi1782 , agreeing with  @RalphH1  on the general requirements  @ShirlynW  on "how to" of the filing and thanking for your answers to my questions, I need to correct one assumption -- that your spouse was a Non-Resident and filing ( filing 1040-NR ? ) for the years  prior to 2022 and after 2019.  The error was because  J-1  can be for a student/ trainee / teacher/ researcher.  The fact that she  was exempt  from paying taxes for the first two  years implies that she was admitted as teacher/ researcher and thus was not an exempt  person post  two years from the date of entry.

That being the case , yes she would have passed the SPT sometime in 2020.  Once you become a resident for tax purposes , you are a resident for all the following years as long as you meet the genera requirements of residency.  Thus  you do not need any special  request to for her to be considered a resident for tax purposes -- she is already one.  The days  abroad for work/ pleasure  -- given the numbers you mentioned  -- would have no effect.

Thus  please follow the  normal  TurboTax methods  ( as outline by @ShirlynW  ) to file your joint return and YES , you should be able to e-file.

Hope that this clarifies everything for you

pk