Solved

Can I choose to be a Resident Alien for the entire 2016 per First Year Choice?

Forum|Forum|7 years ago
June 5, 2019
3 replies
0 views

Given that,

- I and my wife are from India, and have moved to the US on Nov 1, 2016 (on H-1B & H-4 respectively), and are residing in the US till date,

- My wife is a dependent (non-working in US),

- And, I am being considered as a "resident" in India for the purposes of filing tax returns, and I'm leveraging India-US Tax Treaty to avoid Double Taxation in India,

I have the following questions --

1. Can we opt for the "First Year" choice and consider ourselves as Resident Aliens for the entire 2016?

2. Can I claim exemptions for my India income earned during Jan-Oct 2016, based on the provision of "330-days' presence in foreign country, given that I'm also opting for the first-year choice of considering ourselves as Resident Aliens for the entire 2016?

3. If 1 & 2 are not possible, what particular choice should I make for the 2016 returns, to be able to file as resident aliens for the entire 2017 at least?

Best answer by bine22

1. There would be two choices involved. The first year choice would make you a resident alien starting November 1 (so a dual status alien for the year). Then you can make the choice to b treated as resident aliens for the entire year.

2. No you cannot use the foreign earned income exclusion, as you must have been a resident alien for the entire period you are exclusion. Your only option would be the foreign paid tax credit.

T

TaxGuyBill

Employee

1)  Deleted for wrong information.  See bine22's answer below.

2)  Deleted for wrong information.  See bine22's answer below.

3)  Yes, it sounds like you are already automatically a Resident Alien for 2017.

TurboTax is not able to do tax returns for Nonresident Aliens.  It would really be in your best interest to go to a tax professional that is EXPERIENCED with Nonresident Aliens for your 2016 tax return.  They will be able to help you to figure out if the First Year Choice would be a good or bad option to make.

R

rajmiltonAuthor

Thank you TaxGuyBill for your guidance here.

B

bine22Answer

Employee

1. There would be two choices involved. The first year choice would make you a resident alien starting November 1 (so a dual status alien for the year). Then you can make the choice to b treated as resident aliens for the entire year.

2. No you cannot use the foreign earned income exclusion, as you must have been a resident alien for the entire period you are exclusion. Your only option would be the foreign paid tax credit.

T

TaxGuyBill

Employee

Thanks for the correction. I got the First Year Choice garbled with the election for Dual Status aliens to be full-year Residents. I'll edit my comments above.