US Tax Implications of Marrying a Nonresident Alien
When a US Person such as a US Citizen, Lawful Permanent Resident or Foreign National who meets the Substantial Presence Test marries a Nonresident Alien, there are a few tax implications that the US Person must consider. Depending on whether the married couple files a tax return jointly or separately can impact the types of tax implications the US Person must consider. In addition, depending on whether or not the nonresident alien becomes a US Person will also impact the current and future tax year filings. Let’s go through some of the basics of what a US person must consider regarding tax implications when they marry a nonresident alien —
Joint Returns Means Joint Income
When a US Person marries a nonresident alien and they file a joint tax return, then the income from both parties must be included on the tax return. That is because since the return is filing joint — both spouses’ income must be included on the return.
Elections for Nonresident Aliens
When a nonresident alien wants to file a U.S. Tax Return with a US Person and be treated as a US resident there are certain elections that the person can make in order to achieve that goal. It is not uncommon for taxpayers to be unaware that they are supposed to elect when one spouse is a nonresident — but this non-election is typically not fatal to the tax return.
Dual-Status Return for Nonresident Alien
If the non-resident becomes a resident during the tax year, then they may want to consider filing a dual-status tax return in that first year. With a dual-status tax return, the new resident will file a tax return for the portion of the year that they were a nonresident on form 1040NR — and then the remainder of the year in which the taxpayer was a resident they will file a form 1040.
Join Return Foreign Accounts (FBAR vs 8938) for Nonresident Aliens
Here is where it can get a bit confusing: when a US person marries a nonresident alien and they file U.S. tax returns together and they meet the Form 8938 (FATCA) reporting requirements, then generally both spouses’ foreign assets and accounts are also included on the joint tax return. Conversely, when a nonresident alien makes an election to be treated as a resident for U.S. tax purposes on their tax return does not always mean they will have to file an FBAR. Stated another way, just because a nonresident makes an election to be treated as a US resident for income tax purposes on the tax return does not mean that they also have to file an FBAR.
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