Can a US Citizen jointly filing with a nonresident spouse and both treated as a resident, also claim the nonresident spouse child as a dependent?

[dejjbb]

Filing jointly married with statement stating to be treated as US Resident. The child is nonresident alien from Venezuela (Not Mexico or Canada). Does the statement also apply to the child as it does to the married mother?

[bine22]

is the child in the US?

[dejjbb]

Yes in the United States the entire year. The child qualifies under all the rules for qualifying child but the last rule I am unclear about as it says US Citizen, US Nation, US Resident or resident of Mexico or Canada.

[bine22]

And your spouse? How long has she been in the US? What visas do they have?

[dejjbb]

Yes my spouse is working J1 visa teaching. The 2 years being tax exempt has already passed. However she doesn't pass the presence test yet of 183 days. That's why we must file jointly with worldwide income reported and the statement. Her child is under a J2 visa as dependent.

[bine22]

she is a nonresident alien for two calendar years (not necessarily tax exempt). When did she come the the US?

[dejjbb]

She entered the US in July 2014 under a teacher exchange with tax treaty being exempt the first 2 years. Starting July 2016 she began to pay taxes. However when you add the current calendar year days and 1/3 of the days in 2016 it doesn't add up to 183 days for the presence test. So we must include a summary stating we wish to file married jointly as US Citizen and Nonresident alien to be treated as US Resident for the entire year. I need to know if a child J2 dependent of hers would also be included under that statement for US Resident?

[bine22 · Accepted solution]

The exemption for counting days for the substantial presence test id for 2 calendar years, so 2014 and 2015. If she had a treaty exemption, that would be valid for 2 years if the treaty as an exception to the savings clause (which must be claimed on the tax return). 

So for 2016 she would start counting days January 1st, not July. The same goes for the J2 dependent. For the 2016 tax return you count all days of presence in 2016 (not the days in 2017 and 1/3 of days in 2016). So if they both were present in the US January 1st 2016 and stayed the whole year, they would meet the test and be resident aliens.

If the treaty with her country as an exception to the savings clause, you need to claim that and it's best to use form 8833. All income she had from January to July has to be reported, but can then also be entered as negative income, if the treaty still exempts it.

[dejjbb]

Perfect! Didn't know the current year applied to the year being taxed. Thank you!