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File as resident alien using first-year choice?

Forum|Forum|7 years ago
June 5, 2019
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I'm in the US on F-1 since September 2014. My spouse entered US in March 2017 on F-2. On October 1st 2017, I changed from F-1 to H-1B and my spouse changed from F-2 to H4. My spouse had no income in 2017 (US or India)

I do not meet the green card test or substantial presence test for 2017. Hence if I were to file 1040NR, I see the following disadvantages:

- cannot file jointly
- cannot claim spouse as exemption (since India-US tax treaty is only for students and I was on H-1B at the end of 2017)
- cannot file for her ITIN (W-7) since no valid reason to file (claiming exemption is a valid reason, but I cannot claim as said above)
- cannot use TurboTax (doesn't support 1040NR) or Sprintax (doesn't support HSA forms)

But I recently read about First-Year Choice (Pub. 519) and I think both of us may qualify to elect as dual-status aliens, and elect to be treated as resident-aliens for entire year of 2017. This is how:

- We were present for at least 31 days in a row in 2017 (October 1st 2017 till Dec 31st 2017)

- We were present for more than 75% of the remaining period (Oct 1 - Dec 31 2017)

- And we may qualify for Substantial Presence Test in 2018 (may not be by April deadline)

If so then I can use TurboTax for 1040, and also file married jointly and claim exemption for my spouse. Is that correct?

Also I'm not sure when we qualify for Substantial presence test in 2018. Do we need to file Form 4868 for an extension, jointly? And my wife doesn't have SSN/ITIN so what should we mention on the Form 4868? We plan to add the form W-7 (ITIN application) to our joint returns that we will file later (when we meet substantial presence for 2018).

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Best answer by DS30

Yes - you can make the first year choice and then make the choice to jointly file as resident aliens for 2017. You can use TurboTax to prepare your return but you will need to print out the return and attach it to your W-7 filing (for your spouse's ITIN.)

When you file in 2017, a statement, signed by both spouses will need to be attached to your joint return for the first tax year for which the both choices apply.

If you need to wait until after the first filing due date and your spouse does not have an ITIN, you will want to file an extension (Form 4868). You will need to mail in your extension (Form 4868) (You will not be able to efile your extension.)

Since you will be applying for an ITIN, write “ITIN TO BE REQUESTED” on the extension form where her Social Security Number is required.

Here is a link to IRS for Form 4868, it includes the mailing address for filing your 4868.

Additional information for your state income tax filing (if your state has an income tax filing requirement😞

Although many states give an automatic extension when you file the federal extension Form 4868, you may want to check with your State Department of Revenue Contacts to make sure that your state doesn't have a separate state extension filing.

Click here for IRS website ITIN - Frequently Asked Questions

Click this link for more information from the IRS on US Tax Guide for Aliens

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