Married joint filing, each qualified for $5000 tax treaty(resident alien on F1, PRC citizen). However, my wife has income less than $5000. Can we deduct combined $10000?

[NYYY]

If she has $1000 dollar income, can I deduct that $1000? or can I still enter $5000 for her?

I noticed that even if I just deduct $1000, we are getting more back than the tax withheld from her W2… Is this fine?

More details: she is actually non-resident alien. But I am resident alien, passing substantial presence test. We are jointly filing and treating her as resident alien.

[KarenJ]

When did you receive your F-1 visa?  What date did you arrive in the US?

[NYYY]

2013. I am on OPT now. After 5 years, I am considered resident alien.

[pk · Accepted solution]

As I read and interpret the following  form the treaty with  China-->

"A student, business apprentice or trainee who is, or was immediately before visiting a Contracting State, a

resident of the other Contracting State and who is present in the first- mentioned Contracting State solely for the

purpose of his education, training or obtaining special technical experience shall be exempt from tax in that

Contracting State with respect to:

(a) payments received from abroad for the purpose of his maintenance, education, study, research

or training;

(b) grants or awards from a government, scientific, educational or other tax-exempt organization;

and

(c) income from personal services performed in that Contracting State in an amount not in excess

of 5,000 United States dollars or its equivalent in Chinese yuan for any taxable year.

The benefits provided under this Article shall extend only for such period of time as is reasonably

necessary to complete the education or training".

I come to the conclusion that this is "A Student..." , implying the tax exemption is not transferable. Thus  if you on F-1  had income of $10,000 from all sources and your wife  ( on F-1 ) had $3000 then you each have a an exemption of the lesser of actual  or 5000  -- thus you would have $5000 exemption while your wife would have  $3000 for a total of $8000.

Does this answer your question?