Are you a U.S. citizen or permanent resident married to a spouse living overseas? Maybe you are living overseas together, or maybe you are in the U.S. waiting for your spouse to immigrate.
This article discusses filing a tax return when you are married to a “nonresident alien” (NRA). This article focuses on how to choose your “filing status” for purposes of the IRS Form 1040, U.S. Individual Income Tax Return. Your filing status may be one of the following:
- Married filing jointly
- Married filing separately
- Head of household
(You can choose single only if you were not married on the last day of the tax year.)
I am not a tax attorney, and this article is not legal advice. Instead, I just want to point you to resources you may find helpful, including the IRS webpage on NRA spouses. I recommend you seek advice from a qualified tax advisor.
Who Is a “Nonresident Alien”?
Generally speaking, a “nonresident alien” for tax purposes is a person who is not a U.S. citizen and has not passed either the “green card test” or the “substantial presence test”:
- Green Card Test: A noncitizen is a resident if they were a lawful permanent resident (i.e., a green card holder) of the U.S. at any time during the calendar year.
- Substantial Presence Test: A noncitizen is considered a resident during a calendar year for tax purposes if they were physically present in the U.S. for at least 31 days during the current year and 183 days during the most recent 3 calendar years. You need to read the more detailed rules, exemptions for certain individuals (e.g. certain nonimmigrant students, teachers, and trainees), and the closer connection exception.
Married Filing Jointly
According to this helpful article from a tax attorney on the American Citizens Abroad website, some couples should to choose “married filing jointly” in order to qualify for the higher standard deduction and many other benefits that are not available if you file as “married filing separately.” But there’s an important tradeoff: your NRA spouse will be treated as a resident for tax purposes, so their worldwide income will be subject to U.S. income tax.
This option requires that NRA spouse have either a Social Security number (SSN) or an Individual Tax Identification Number (ITIN). Generally, a noncitizen can apply to the Social Security Administration for an SSN only if they are an immigrant (i.e., green card holder) or they otherwise have been granted authorization to work in the U.S. Otherwise, an NRA spouse may qualify for an ITIN if they qualify for a tax benefit. The Form W-7, Application for an ITIN, can be filed with your tax return or separately.
Married Filing Separately
If choosing the “married filing jointly” status does not result in tax savings for you, you can choose “married filing separately” status. The NRA spouse isn’t required to have a Social Security number or ITIN.
Head of Household
If you pay more than half the cost of keeping up a home for yourself and a qualifying child or other relative (not the NRA spouse), you may qualify for the head of household filing status. The tax rates and standard deduction for this filing status are superior to that of the “married filing separately” filing status.