Do I need an ITIN for foreign spouse if I’m not claiming them?

[Kabuki88]

I’m just really confused and seen a lot of conflicting information. I’m getting married to a Japanese citizen in November.  We both live and work in Japan and neither of us have income that would go over the income threshold but I’ve always filed my taxes just to keep up with them. I found out that he would need an ITIN even though I want to file married filing separately next year. I’m really confused as to how he should do it. My tax agent in the US said he should apply for the number now. The agent here in Japan said everything is behind in the states so it will take awhile.  Everything I read says he needs to apply when I file my taxes and I have to mail the W7 form with my return. And yet I’ve also seen people say he doesn’t need an ITIN at all if he’s not filing taxes and I’m not claiming him on my return.  Does he need the number? Is it okay to apply now before I do my taxes next year? I’m really confused and concerned about the whole aggravating process. 

[DoninGA]

If you are a US citizen and your spouse does not have a Social Security number or an ITIN and you are not applying for an ITIN with the tax return then you can only file your tax return as Married Filing Separately. 

The tax return can only be printed and mailed, it cannot be e-filed.

When you print the tax return manually enter NRA for non-resident alien in the block for the spouse's Social Security number.

If you are filing your tax return as Married Filing Jointly you must apply for an ITIN with the tax return and you would need to be providing a statement with your tax return that you want your Nonresident Alien Spouse Treated as a Resident.  See IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad pages 6 and 7 - https://www.irs.gov/pub/irs-pdf/p54.pdf

Go to this IRS website for ITIN information - https://www.irs.gov/individuals/international-taxpayers/general-itin-information

[Kabuki88]

I’ve seen people say that you can put NRA, but I was told that even if filing separately he still needs an ITIN.  Is that not true? Honestly, my tax guy back home was uncertain as they don’t usually deal with foreign marriage stuff. My main concern was wondering if he could actually apply for the ITIN now instead of me having to send his W7 with my return next year. Because the wording is confusing, the IRS site says you have different options, send the application with your tax return or apply at a certified agency but it also says new applications must be sent with your return. If I could put NRA that would be wonderful because there isn’t a need for him to have anything to do with US taxes at this point as we have no US income and no plans to return as of yet.   

[Opus 17]

You do not need an ITIN if you would be filing as married filing separately.  In that case, you only list your own income and deductions. Married filing separately will usually cause you to owe more tax compared to married filing jointly, because many deductions and credits are reduced or disallowed.  However, if you file jointly, you would have to include all of your spouse’s worldwide income even though your spouse is not a US citizen.  You would get a credit or deduction for foreign income taxes that you and your spouse paid.  Only you and your spouse can figure out whether it is better for you to file jointly or separately next year by preparing different test returns that test each scenario.

If you will have lived outside of the US for at least 330 days this year, you will probably qualify for the foreign earned income exclusion. That means that you do not even have to pay US tax on income that you receive in a foreign country as long as that income is “earned” from working. (Unearned income, such as passively receive rent, or prizes or interest and dividends, is still subject to US tax.)

Normally, you only apply for an ITIN for your spouse by attaching the application to your first married filing jointly tax return, because that is what gives them a financial connection to the United States.  There are a few exceptions that would allow you to apply for an ITIN early, you would have to check the instructions on the form W7 or the IRS website to see if they apply to you.

[DoninGA · Accepted solution]

---

@Kabuki88 wrote:

I’ve seen people say that you can put NRA, but I was told that even if filing separately he still needs an ITIN.  Is that not true? 

---

Go to IRS Publication 501, Dependents, Standard Deduction, and Filing Information on page 7 - https://www.irs.gov/pub/irs-pdf/p501.pdf#page=7

If your spouse doesn't have and isn't required to have an SSN or ITIN, enter “NRA” in the space for your spouse's SSN.