Form 8958 Required for Non Resident Alien Spouse Living Seperately?

[BridgeHall555]

For 2019, I am trying to figure out whether I am REQUIRED to file Form 8958 (Allocation of Tax Amounts Between Certain Individuals in Community Property States)

Per page 8 of IRS Publication 555 reads “if you are a US citizen or resident alien and don’t choose to treat your nonresident alien spouse as a US resident for tax purposes, treat your community income as explained under Spouses living apart all year. However, you don’t have to meet the four conditions discussed there.”

Spouses living apart all year. If you are married at any time during the calendar year, special rules apply for reporting certain community income. You must meet all the following conditions for these special rules to apply.

1.You and your spouse lived apart all year.

2.You and your spouse didn't file a joint return for a tax year beginning or ending in the calendar year.

3.You and/or your spouse had earned income for the calendar year that is community income.

4.You and your spouse haven't transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. Don't take into account transfers satisfying child sup-port obligations or transfers of very small amounts or value.

We actually meet all of the conditions despite not being required to.

In reference to an example, the page goes on to state “But because they meet the four conditions listed earlier under Spouses living apart all year, they must disregard community property law in reporting all their income (except the interest income) from community property. They each report on their returns only their own earnings and other income, and their share of the interest income from community property.”

Based on this, in our case, there would be no community income, including income from community property. But the instructions do not explicitly state whether we need to fill out the form and make the allocation of my income to myself and my wife’s to her OR just not submit the form! What to do?

Also, on my Form 1040, in the box requiring spouse’s SSN, what do I do? Write in NRA (non -resident alien)? Apply for a ITIN (tax identification number) using Form W-7 even though my spouse does not need one? What to do?

Reference: https://www.irs.gov/publications/p555

[BridgeHall555]

I failed to state that I want to file as married filing separately.

[VictoriaD75]

Continue to complete the community property allocation, but you do not need to allocate between spouses. You can allocate all income to yourself. There are examples included in the publication you have referenced.

[BridgeHall555]

Hi Victoria:

Thank you so much for your feedback. Will take another look. So what you are saying is fill in both salaries but allocate 100% of husbands to his column and 100% of wife’s salary to her column?

So, go ahead and fill out W7 to get the ITIN? Or write non-resident alien in the box?

Also, as a follow on to my above quest for your feedback, I want to confirm that my case qualifies as “Spouses living apart all year.” I think we do but am interested in your take:

Reference:

From Pub 555

“Domicile

The law of the state, or the law of the foreign country, where you are domiciled will determine if you have community property, community income, or both. If you and your spouse (or your registered domestic partner) have different domiciles, check the laws of each to see if you have community property, community income, or both.

You have only one domicile even if you have more than one home. Your domicile is a permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. The question of your domicile is mainly a matter of your intention as indicated by your actions. You must be able to show that you intend a given place or state to be your permanent home. If you move into or out of a community property state during the year, you may or may not have community income.

Factors considered in determining domicile include:

Where you pay state income tax,

Where you vote,

Location of property you own,

Your citizenship,

Length of residence, and

Business and social ties to the community.

Amount of time spent.

The amount of time spent in one place doesn't always explain the difference between home and domicile. A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property. Your intent is the determining factor in proving where you have your domicile.

Note. When this publication refers to where you live, it means your domicile.”

Scenario: Husband (me)  is US citizen (by birth), maintained residence in US entire life, pays State income taxes, and runs own investment business permitting him to travel on his own schedule. Wife is non-US resident, foreigner residing and working in low tax country. All her ties, family, business and social are in the foreign country. She visits and vacations a few weeks per year to US. Husband travels to foreign country and stays months at a time on tourist visa. At the moment, they intend to keep this scenario for the foreseeable future.

Question: Can husband file as MFS (married  filing separately) and be considered as “Spouses living apart all year” for purposes of Form 8958 filing (or no need to file requirements in previous post above)?  Thanks again.

[BridgeHall555]

Hi Victoria:

Thank you so much. Will take another look. So what you are saying is fill in both salaries but allocate 100% of husbands to his column and 100% of wife’s salary to her column?

So, go ahead and fill out W7 to get the ITIN? Or write non-resident alien in the box?

Also, as a follow on to my above quest for your feedback, I want to confirm that my case qualifies as “Spouses living apart all year.” I think we do but am interested in your take:

Reference:

From Pub 555 (https://www.irs.gov/publications/p555)

“Domicile

The law of the state, or the law of the foreign country, where you are domiciled will determine if you have community property, community income, or both. If you and your spouse (or your registered domestic partner) have different domiciles, check the laws of each to see if you have community property, community income, or both.

You have only one domicile even if you have more than one home. Your domicile is a permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. The question of your domicile is mainly a matter of your intention as indicated by your actions. You must be able to show that you intend a given place or state to be your permanent home. If you move into or out of a community property state during the year, you may or may not have community income.

Factors considered in determining domicile include:

Where you pay state income tax,

Where you vote,

Location of property you own,

Your citizenship,

Length of residence, and

Business and social ties to the community.

Amount of time spent.

The amount of time spent in one place doesn't always explain the difference between home and domicile. A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property. Your intent is the determining factor in proving where you have your domicile.

Note. When this publication refers to where you live, it means your domicile.”

Scenario: Husband (me)  is US citizen (by birth), maintained residence in US entire life, pays State income taxes, and runs own investment business permitting him to travel on his own schedule. Wife is non-US resident, foreigner residing and working in low tax country. All her ties, family, business and social are in the foreign country. She visits and vacations a few weeks per year to US. Husband travels to foreign country and stays months at a time on tourist visa. At the moment, they intend to keep this scenario for the foreseeable future.

Question: Can husband file as MFS and be considered as “Spouses living apart all year” for purposes of Form 8958 filing (or no need to file requirements in previous post above)?

[BridgeHall555]

More data points......

I don’t see anything in Pub 555 which states Form 8958 is required to be filed in the case of Spouses living apart all year and with no community income. There is nothing explicitly stating a requirement to file and my wife has no SSN. The form itself requires an SSN.

To the contrary, p 10 of Pub 555 explicitly states in cases where Spouses are not living apart all year but are filing separately are required to file Form 8958.

Can you clarify? Thanks again.

[notarobot1]

Similar situation here, what did you end up doing?

[MaryK4]

You must disregard certain community property laws if both you and your spouse are nonresident aliens, or one of you is a nonresident alien and the other is a U.S. citizen or resident and you do not both choose to be treated as U.S. residents.  

If this is the case, you can file as you would if you did not live in a community state for the federal and state.  

@notarobot1 

[xcxcvxcxcxc]

similar situation but my spouse dont have a ssn or itin to put on form 8958 he is a Non resident alien he cannont apply for this itin until i file my taxes to show he has proof of residency change and this return was going to be one of the documents so what do in put in the section that askes for his social

[AbrahamT]

Send along a filled out copy of Form W-7 with the Form 8958. For information on filling out this W-7, see HERE. In the instructions, further down as to what qualifies as Supporting Documentation. You may file a copy of your W-7 when 

you file your tax return as well.  

P.S.  No where among the list of documents does it indicate that a copy of your filed tax return can suffice as proof of residency change.

Enjoy!