Foreign Earned Income exclusion

[Pack4236]

During Calendar year 2022 my foreign fiancé arrived in the United States ,  We  married and are now looking to organize our  documents for filing taxes next year! 

   Our situation is this my wife has filed for permanent residency and been issued a social security card.  She earned a small amount of money (about 10K) in her home country (Philippines) and based on what I read we plan to take the earned income exclusion!    She would meet the physical presence test.  (August to August)  Based on what I have read (thank you experts of the T/T community)  I would need to complete my Tax return print it and mail it with a IRS form W-7 (request for an ITIN) to the IRS.  

  The Question I have is do I need to file the W-7 form if she has already received a social security card and do I have to mail it in if she is not required to file a W-7!   

  Thanks in advance

[Anonymous_]

@pk ?

[pk]

@Pack4236 , first congratulations on being married  ( to the love of your love) and pray that love will see you through many many years ( even with the occasional ....).

Coming back to current reality :

(a) are you a US person (citizen. green Card, Resident for tax purposes)?

(b)When did she arrive -- exact date please and under which visa ( K ? or what ?)

(c) Does she continue to work for her Philippines employer or is the  income you quoted is from before she entered the USA ?  I am assuming that the work was actually performed in the Philippines ( or was it in the USA ? ).

(d) How did you file 2021 ? And you are now talking about the tax year 2022--yes ? 

Once I hear from you I will circle back--please 

pk

[Pack4236]

Hi PK and thank you for the kind words and super speedy reply! 

   First my fiance arrived  August  22,2022 on a K-1 Visa!  The income she earned was in the Phils and shestopped working in late July 2022  has not worked since her arrival!  We were married on September 15 2022

  I am a US citizen and filed as Single last year.  Yes this question concerns 2022!

Thanks 

DEC

[pk · Accepted solution]

@Pack4236 , thank you for your answers to my questions. The situation as I see it :

1. You a US person ( Citizen), got married to a Non-Resident Alien on 09/15/2022.

2. The spouse arrived to the US on 08/22/22 on K-1, have been granted SSN and has applied for Green Card

3. Spouse has been in the USA since entry in August 2022 and has had no income from home country since Jul 2022 ( prior to leaving for the USA.

4. For simplicity, assume that this entry in August 2022 was the fist entry to the USA within the last three years ( 2020, 2021, 2022 )

 Thus for 2022 tax year , if you file jointly  ( Married Filing Joint ) for 2022, and she is treated as a Resident ( either because Green Card test or because wishes to be treated as a resident ), her foreign income  ( i.e. the  Philippines earnings prior to entering USA is not under the  US tax purview).   So there is no recognition/ reporting  for US tax purposes  and therefore no exclusion of foreign income.  The reason for this :

                              (a) Whether you use the Green Card test  ( issued / admitted) or request to be treated as a resident, you are resident for the  year 2022.

                             (b) The start day of the year is the first day you are physically present in the USA -- thus the year start for your  wife would be 08/22/2022  ( assuming of course  that that was the first day in 2022 she was present in the USA for any reason ).

 Also note that , if you are requesting for her to be treated as a resident for the year 2022 ( i.e. she has not been issued the Green Card ), your request  ( signed by both you and her )  needs to stipulate :

                              (i)  she has been in the country at least 31 days in 2022;

                              (ii)  she has been in the  USA at least 75% of the days  using a test period of first entry and the end of the year  i.e. 75% of the days between 08/22/2022 and 12/31/2022;

                              (iii)  she was not a resident in 2021

and                       (iv) she does meet the Substantial Presence Test in 2023  --- you will of course need to file post meeting SPT.

Does all this make sense ?

Is there more I can do for you ?

pk

[Pack4236]

PK  Thank you for this advice and just one final question;  is there a special IRS form or a simple letter  with the appropriate statement on it and of course signed and dated by my wife and myself!

Thanks Ever so much  

DE Cooke

[Pack4236]

PK after about 30 seconds I realized I did not ask the most important question;  Should my wife get her green card prior to filing and he position as a permanent resident established, would I still need to include a statement or is it an assumed fact!

Thanks and I promise no more questions

[pk]

@Pack4236 , no worry about questions, you ask we answer , the more the better--lol

 If your wife has gotten the GreenCard,  there is nothing required-- she files as resident-- no special note or anything else required.  This also means  that if some one ,  and without having a greenCard ( or approval thereof ) files as a resident there is nothing to stop them.  However, you file under penalty of perjury ( whether wet signature or electronic signature) and if caught at audit, penalty is bad for your reputation and purse.

Does that answer you question ?

pk

[Pack4236]

HI PK yes it does and in the small chance that she doesn't get her GC before filing I assume the letter addendum to my return is sufficient