My wife is currently in Canada visiting family, and she is planning on filing her taxes there for when she worked her job 1/1/17 - 7/7/17. We were married in August 2017, and as of a month ago received her Permanent Residence Card. She had no income in the U.S. Since she is filing her taxes in Canada, do I still need to report her income MFJ in the U.S. even though she didn't have any income here? I have heard we need to file form 1116, but I am not sure.
Assuming that you are US citizen/resident and that your wife was admitted under K-1 only in August of 2017 and did not have significant presence in the USA during the years 2015, 2016 and 2017 ( prior to being admitted under K-1), She would treated as a non-resident alien till adjustment of status or fulfilling substantial presence test ( all days in 2017, 1/3 of days in 2016 and 1/6 of the days in 2015 ). Thus you can file MFJ with her without subjecting her Candian income to US taxes. She can also choose to be treated as a resident for the whole year of 2017( via a statement attached to the effect ) and therefore exposing her world income to US taxes for the whole of 2017 --- then claim foreign tax credit for taxes paid to Canada on this foreign income.
If you need more on this, please comment
Assuming that you are US citizen/resident and that your wife was admitted under K-1 only in August of 2017 and did not have significant presence in the USA during the years 2015, 2016 and 2017 ( prior to being admitted under K-1), She would treated as a non-resident alien till adjustment of status or fulfilling substantial presence test ( all days in 2017, 1/3 of days in 2016 and 1/6 of the days in 2015 ). Thus you can file MFJ with her without subjecting her Candian income to US taxes. She can also choose to be treated as a resident for the whole year of 2017( via a statement attached to the effect ) and therefore exposing her world income to US taxes for the whole of 2017 --- then claim foreign tax credit for taxes paid to Canada on this foreign income.
If you need more on this, please comment
Yes I am a U.S. citizen/resident and she was admitted under a K-1 in mid/late August. Based on what you have said, I will go ahead and file MFJ without subjecting her Canadian income to U.S. taxes. She is waiting on me to give her the go ahead to submit her Canadian tax return. Thank you so much for your help!