Tax Year Prior to 2020: USA (H1b) non-US citizen moved to Canada as Permanent Resident

[Vaiwad]

Hi,

Me and my wife both were working in the US from June 2017. Both on H1B visa. We both left US in April 2019 for good. Now while filing taxes do we have to file a dual resident return or a resident return?

if we file a resident return can we file married jointly?

Which will be better to save on taxes? @LinaJ2020 

[VictorW9]

Being you are not a U.S citizen or permanent resident, you have no obligation to file. But if you think it will be of benefit to you, then you can file a federal return along with a part year return resident state return for whatever state you were living in before you moved to Canada. There is a reciprocal agreement between the U.S. and Canada you might want to consider if you can deduct any U.S. taxes owed against a Canada tax obligation.

[Vaiwad]

Thanks for your response. I am a citizen of neither of the two countries and had no relation to Canada as well before I moved. Does this reciprocal agreement hold true in that case. 

[KarenJ2]

According to the IRS, your residency ending date is December 31, 2019, unless you claim a closer connection to another country.  Then you would file a dual status return.

If you have US source income in 2019, you must file a 2019 US return.

Yes,  you can file a full year resident return and file married filing jointly.  

[Vaiwad]

Thanks @KarenJ2 

In your opinion will it be better to file a dual status return or a resident return considering that US income was only for 4 months and is almost half of Canadian income?

[KarenJ2]

You should file the resident return.  The resident return allows the standard deduction which for married filing jointly is $24,400.  You are not allowed to use the standard deduction with a dual status I return and the dual status return is complicated.  Also you would have to file married filing separately with dual statue.

You need to include your worldwide income on your resident return.  You can use the foreign tax credit to help offset any double taxation in 2019.