A Nonresident Alien Spouse Treated as a US Resident for Taxes

Nonresident Alien Spouse Treated as a US Tax Resident

When a person is considered a U.S. Citizen or a Resident of the United States for tax purposes, it typically means that they have to report their worldwide income on IRS Form 1040. And, with increased globalization, it is not uncommon for a US resident to have a non-resident alien spouse. For US tax purposes, when a person is a non-resident, they do not have to file a US tax return other than to report their US-sourced income. But, in some situations in which the non-resident alien may have low income and/or is not concerned about disclosing foreign assets on various international reporting forms such as Form 8938, it may benefit the taxpayers to file a joint return with their US person spouse and for the non-resident alien spouse to elect to be treated as a US resident for tax purposes. Let’s take a brief introductory look at a non-resident alien spouse being treated as a US resident for taxes.

Married on the Last Day of the Year

In order to file a joint tax return with a spouse, it generally requires the spouses to be married on the last day of the year. There are some exceptions involving certain separation/divorce scenarios but the general rule is that taxpayers must be married on the last day of the year in order to claim joint filing status.

Nonresident Alien Makes an Election 

With a non-resident alien wants to file with a US citizen or resident of the United States they have to make an election in order to do so. There are various situation scenarios that qualify for the election. The eligibility requirements may differ depending on whether or not the taxpayer is considered a resident alien for a portion of the year or considered a non-resident alien for the entire year. It is also important to note that when making the election, spouses must file jointly in the first year — but in later years, the taxpayers can file separately.

• • • “Example 1. Pat Smith, a U.S. citizen, is married to Norman, a nonresident alien. Pat and Norman make the choice to treat Norman as a resident alien by attaching a statement to their joint return. Pat and Norman must report their worldwide income for the year they make the choice and for all later years unless the choice is ended or suspended. Although Pat and Norman must file a joint return for the year they make the choice, they can file either joint or separate returns for later years.

    • Example 2. When Bob and Sharon Williams got married, both were nonresident aliens. In June of last year, Bob became a resident alien and remained a resident for the rest of the year. Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return for last year. Bob and Sharon must report their worldwide income for last year and all later years unless the choice is ended or suspended. Bob and Sharon must file a joint return for last year, but they can file either joint or separate returns for later years.” 

Head of Household Alternative

Instead of filing jointly, when the US resident has a non-resident spouse they may instead qualify to file HOH (Head of Household) but there are certain requirements that must be met. This information can be found in IRS publication 501.

Making the Election

There are certain requirements that must be met in order to make the election to treat a nonresident spouse as a resident alien for tax purposes.

As provided by the Internal Revenue Service, publication 54: 

• • • “How To Make the Choice (Original or Amended Tax Returns)

      • Attach a statement, signed by both spouses, to your joint return for the first tax year for which the choice applies. It should contain the following. •

        • A declaration that one spouse was a nonresident alien and the other spouse a U.S. citizen or resident alien on the last day of your tax year and that you choose to be treated as U.S. residents for the entire tax year.

        • The name, address, and SSN (or ITIN) of each spouse. (If one spouse died, include the name and address of the person making the choice for the deceased spouse.) You generally make this choice when you file your joint return. However, you can also make the choice by filing a joint amended return on Form 1040-X. Attach Form 1040 or 1040-SR and enter “Amended” across the top of the amended return. If you make the choice with an amended return, you and your spouse must also amend any returns that you may have filed after the year for which you made the choice. You must generally file the amended joint return within 3 years from the date you filed your original U.S. income tax return or 2 years from the date you paid you.”

International Tax Law Firm: Golding & Golding

Golding & Golding specializes exclusively in international tax, and specifically how to expatriate from the United States.

Contact our firm today for assistance with getting compliant.