L1 Visa Dual status tax return with dependent spouse and kid

[alapati_am]

Hello turbotax team,

I moved to the US from India on 31st May 2019. Before that I was an employee in India and was paying taxes there.  Since I stayed more than 183 days this year, I think I pass the substantial presence test. I have applied for my spouse's EAD and SSN but they are still being processed.  I have a 2 year old kid as well. 

I understand that I should be filing a dual status tax return.  I have no income in the US before May 2019. 

So, 

1) My 1040NR form should mention as 0 income right ? I already paid taxes on my income in India before May 2019. Can someone please confirm that mentioning 0 income on 1040NR is the right thing ? 

2) I would like to get an ITIN number for my kid. So I should be using applying his W-7 form along with my tax return right ? 

3) Since Dual status returns can't use standard deduction, how can I get any tax benefit this year ? 

4) I also understand that for Dual Status tax return, I should only be filing married separately option. In such case, Should my spouse also file a return. My spouse is not working and has no income before or after coming to the US. 

5) Finally, Is there any product in TurboTax that applies to my situation. I am ready to buy it, so please connect me to the right people. 

[KurtL1 · Accepted solution]

To answer your questions:

1) When you file your 1040NR you would only be claiming income effectively connected to the United States. If you did not have any income effectively connected to the Untied States your income would be $0.00

2) When applying for an ITIN for your wife and child you must attach a tax return to the W-7's you are submitting. When you submit the documents you would attach your tax returns behind the signed W-7's. 

You can avoid mailing in the original document by going to a Certified Acceptance Agent or scheduling an appointment at a IRS office to certify the documents. You can look up the address of the closest IRS and the address of a local Certified Acceptance Agent on the IRS website IRS.gov.

3) On Form 1040NR, page 3, there is a limited Schedule A (Itemized Deductions) that allow for some tax deductions instead of the Standard Deduction.

4) On your Form 1040NR, if you are from India and were a student or business apprentice, you can include your wife and children on the return as dependents. Your wife is not required to file a separate Form 1040NR for the first part of the year.

5) TurboTax does not support Form 1040NR or Dual-Status returns. You will need to use Sprintax to file a Form 1040NR and the Dual-Status return. If you have questions you can contact Sprintax Help for assistance.

[alapati_am]

Thank you very much @KurtL1 . 

I understand that dual status basically means filing both 1040NR and 1040 for this year. So Can I use Married filing jointly here to claim standard deductions or child tax credits etc ? I am confused because some websites say that this is not allowed. However, some of them say that since spouse is also a resident at the end of year, we can claim all the above deductions. Can you please confirm ? 

[KurtL1]

Yes, you are allowed to use the Married Filing Jointly filing status and are entitled to the Child Tax Credit and the other tax credits allowed to a resident alien on the Form 1040 return. 

When filing a Dual Status return you are not allowed to use the Standard Deduction when filing the Form 1040 of the return process. See Restrictions for Filing Dual-Status Tax Returns.