Only income is overseas non-citizen non-resident spouse - how to file?

[pasadena]

Does a U.S. citizen who was living in the U.S. for all of 2020 and had no income have to report the income of their non-U.S-citizen spouse who lived, worked, and paid taxes overseas for all of 2020? And should it be a joint or separate filing? The assets overseas total less than $50,000.

[MaryK4]

If your spouse is a nonresident alien for tax purposes, you do not have to file or report on his income outside the United States.  If you did not have any income, you would not have to file a tax return.  If you did file a U.S. return, you could file Married- Separate or Joint.

If your spouse is a nonresident alien, you can treat your spouse as a resident alien for tax purposes. If you choose this option, you can file a joint tax return with your spouse and have an increased standard deduction. You increase your standard deduction, but all your spouse's worldwide income will be taxed by the United States.

[pasadena]

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@MaryK4 wrote:

If your spouse is a nonresident alien for tax purposes, you do not have to file or report on his income outside the United States. 

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Many thanks for the quick reply. Is there a particular procedure or document for declaring him a nonresident alien for tax purposes?

Also, someone told me I could file as single. Do you know if that's true? It wasn't clear whether this was just their way of saying "married filing singly", or if filing as a single unmarried person is something entirely different that is allowed in my situation.

[AmyC]

Your only filing options are married filing separate or married filing joint. If you want to include your spouse, you can declare that you want to treat your spouse as resident alien for tax purposes. You would file all of their income and include a credit on form 1116 for tax paid to foreign countries in good standing with US.

Nonresident Alien Spouse | Internal Revenue Service - has complete details on exactly what to do, how, and when for your exact situation.

More to file: Here is a comparison of the 8938 and FBAR requirements. The FBAR is not part of the tax return. It is filed separately. File FBAR through the Financial Crimes Enforcement Network.

Related:  About Form 1116, Foreign Tax Credit 

[pasadena]

Many thanks for this. So to make sure I understand - is the following correct?

Given our situation (spouse is alien, and for 2020 was resident outside the U.S., employed outside the U.S. and paid taxes outside the U.S.; and I had no income)...

1. First we obtain an Individual Taxpayer Identification Number for my spouse, because he's not eligible for an SSN
   
   
2. Then I file separately, showing my income of zero, and in my return I report his income even though it won't be taxed. He does not file in the U.S. at all.

[JeffreyR77]

You can apply for an ITIN for your spouse for 1 of two reasons: because you are married and wish to be able to file joint tax returns in the future, or 2) have the need to file a tax return in the present and need a tax ID number for that tax return.

In your present situation there is no requirement for a tax return to report your spouse's foreign income. 

You can file a tax return with an W7 ITIN application. 

Filing the ITIN application with the tax return is the most common way to request an ITIN.

You would not file Married Filing Separately and include any of your spouse's income on that return. 

Application for IRS Individual Taxpayer Identification Number   Supporting Documentation for ITIN Application (see p3 col 2)

[pasadena]

Many thanks for this