Canadian, living in Canada and receiving US SS and CalPers retirement income.

[ziggy1465]

My wife is Canadian, living in Canada and receives US SS and CalPers retirement income.  I'm a US citizen also recieving SS and living in Canada.  I know I have to declare my World Wide income in the US, but what does my wife have to declare?  Specifically, does she have to include Canadian income as well as her US income?  Also, can we file jointly if she only declares her US income and not her Canadian income?

[carolineb]

Hello! According to the IRS, if you are married to a non resident alien and wish to file jointly on your US return, both spouses must report their combined worldwide income. Otherwise, you can choose to file separately and report only your income on your US return. 

Here is a helpful link that might assist you further: Filing Status if Married to a Non Resident Alien

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[ziggy1465]

Thanks, that makes sense.

If I file separately, does she need to file at all in the US?  She receives US SS and US retirement income (CalPers)?  I understand SS is taxed in Canada per the tax treaty, but does that cover her US state retiremet income as well? 

[carolineb]

If a non resident alien has US source income (CalPers) and the tax liability on that income was satisfied by the withholding of tax at the source, then she must file a return to report her US source income only. If she has enough withheld from her pension to cover any US tax liability, no return is necessary.