Status change from F-1 OPT to H1B

[rajshah0112]

In 2019, My F-1 status got changed to H1B. H1B Visa start date is 10/01/2019.

1. Will I be considered as a resident alien or nonresident alien for 2019 tax filing purposes?

I got married on 12/10/2018 and my spouse was with me in 2019 for 03/14/2019-12/31/2019.

2. Can I claim her as a dependent to get a tax benefit?

She doesn't work and we're planning to apply ITIN for her with 2019 tax filing. Please advise.

[LinaJ2020 · Accepted solution]

1.  You have two options.  Either nonresident or dual-status resident.  Please see below for an explanation:

If you had stayed in the US for not more than five years by the end of 2019, technically you are considered as a nonresident.  You would need to file a Form 1040-NR.  However, if you anticipate you will be staying in the US for at least 183 days in the year of 2020 or meet the Substantial Presence Test SPT, you can make an election to treat yourself as a resident from October to December 2019, and file as a dual-alien alien.  In this case, you will be filing as a non-resident for the first 10 months ( 1040NR) and a resident for the rest of the year (1040).  To make the election, click here FirstYearChoice ( Under Residency Starting Date Under the First-Year Choice)

2.  It depends.  If you file as a non-resident, on the Form 1040-NR, to claim your spouse as a dependent, you have to be a US national, a resident of Canada, Mexico, The Republic of Korea (South Korea), a U.S. national, or a student or business apprentice from India.  If you make an election to choose to be a dual-status, on the resident portion 2019 Form1040, you cannot claim your spouse as a dependent even though she does not work.  See Spouse as dependent 

Please note that there are pros and cons by filing as a dual-status taxpayer, for more information, please click here:  Dual Status

[rajshah0112]

Lina,

Thanks for sharing the information, I still have few questions. Please see below.

1. What date I'll be able to pass SPT? For 2019, I was in US for 1/1/19-09/30/19 (F1 Status) and 10/01/19-12/31/19 (H1 Status). And, let's assume for now that I'll be in US for whole 2020. 

2. How can I figure out prorated federal and state tax as I'll need to file 1040 NR form for Jan-Sep and Form 1040 for Oct-Dec.

Please advise. 

[LinaJ2020 · Accepted solution]

1.  If you anticipated you would be staying within the US for the whole year in 2020 ( which is more than 183 days), you pass the SPT.  

2.  To work out how you owe federal and state taxes on each form, you would have to complete both the Form 1040 NR and 1040. 

• For Form1040-NR, as TurboTax does not support these forms, I would advise you to contact Sprintax who is affiliated with TurboTax to assist our non-resident customers.  Click here https://www.sprintax.com/ 

• For Form 1040, you can use the TurboTax program, select the products that fit your needs.  Complete the step-by-step interview questions in the navigation.  At the end of the process, the program will show you any tax dues or refund for both federal and state.

To access the Department of Revenue of your state, click here States

[rajshah0112]

Lina,

Thanks for the guidance. I dig into it and read publication 519 and came to the conclusion that I'll have to file an extension first than I can do married filing jointly (Turbotax form 1040 - resident alien) after following these steps.

1. IRS will consider myself and spouse as a resident alien for the whole 2019 year if I submit a statement to consider ourselves as a dual-status alien + choosing resident alien status. 
2. We'll be eligible to choose dual-status alien as I was on F-1 (01/01/19-09/30/19) and my spouse on F-2 and the status got changed to H1B (10/01/19-12/31/19) and spouse on H4. 
3. And, Choosing a resident alien clause has the following requirements which we could pass after passing the substantial presence test. 

• You were a nonresident alien at the beginning of the year. (Yes we were)
• You are a resident alien or U.S. citizen at the end of the year. (Yes we are going to be after passing SPT - June 2nd, 2020)
• You are married to a U.S. citizen or resident alien at the end of the year. (Spouse will be resident after passing SPT)
• Your spouse joins you in making the choice. (We'll provide a statement for that)

Please advise whether I'm going in the right direction or not. 

[LinaJ2020]

That is correct.