Questions about filing status and child credit

[balNgita]

Hi all

1: My status: H1B visa from 2016, citizen of Nepal.

2. My wife: Citizen of Nepal, lived in the US with me until the Dec 23, 2017. Has SSN.

3. Two kids born in the US: daughter: 7-13-2016.    and son: 9-13-2017

4. Wife and kids lived in Nepal from Dec 25, 2017 to Jan 16, 2020, and returned to the US on Jan 17, 2020.

Questions: 

Do I file my tax return as married filing jointly or separately or single or otherwise for the tax years 2018 and 2019?

Can I claim child tax credits or other dependent credits for the given years? 

I supported my wife and kids 100% while they were in Nepal. My wife did not earn any money in the tax year. 

Thank you again

Baru

[MarilynG1]

If you were married on 12/31/2019, you can't file as Single.

You can file as Married Filing Jointly and claim your wife and children, since you supported them, even though they did not live with you all year.

You may qualify for the Child Tax Credit for your children, but not the Earned Income Credit, as you were not the Custodial Parent. 

You can only file tax year 2019 right now as an Efile.

To file for tax year 2018, you would need to purchase and download TurboTax, then prepare and mail a 2018 tax return. 

Click this link for detailed  info on Rules for Claiming a Dependent. 

Click this link for info on How to Prepare a Prior Year Return . 

[balNgita]

Thanks, Marylin. 

And  my wife and kid did not have the health coverage for the entire year. How do I address this? Am I going to be penalized for this?

Bal

[MarilynG1]

No, there is no longer a Penalty for not having Health Insurance.

TurboTax will not ask about your Health Insurance. 

If you did receive a 1095-A for Marketplace insurance, click this link for info on How to Enter your 1095-A . 

[KarenJ2]

As your wife was a nonresident for all of 2018 and 2019, you need to attach a statement to your return electing to file a married filing jointly tax return.  You will find the statement and information about treating a nonresident spouse as a resident on page 9 of Publication 519. You will need to print your return and attach the statement before mailing.  You both need to sign the statement and declare your worldwide income on your return.

For the 2018 tax return and health question, your wife is exempt from the 2018 health insurance requirement as she was a nonresident who elected to file a joint return with a US spouse.

No she does not need to pay a penalty.  The IRS allows individuals an exemption for the first year they are in the US.  They allow this even if you choose to file married filing jointly in her first year in the US.  Please see the attached link , question number 8 https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-indivi... 

 Individuals who are exempt under this rule include: 

• Nonresident aliens; 

• Dual-status aliens in their first year of U.S. residency; 

• Nonresident aliens or dual-status aliens who elect to file a joint return with a U.S. spouse; 

• Individuals who file a Form 1040NR or Form 1040NR-EZ (including a dual-status tax return for their last year of U.S. residency); and 

• Individuals who are claimed as a personal exemption on a Form 1040NR or Form 1040NR-EZ 

TurboTax does not list the above exemptions under Health Insurance. You will need to choose the option: I'll pick who had it and which months.  

According to the instructions for Form 8965 under types of exemptions, page 3, the type of exemption she falls under is Code c, the same code that is used for the option in TurboTax  for Spent 330 days or more outside the US.  So you will need to check this option to receive the exemption. 

https://www.irs.gov/pub/irs-pdf/i8965.pdf