1. Unique Filing Status and Exemption Situations
Entire lesson
Unique Filing Status and Exemption Situations
Individuals who are not U.S. Citizens
Pub 4491 – Lesson 8
Pub 4012 – Tab L
#7 removed ref to P519 – covered in next slide
#15 deleted, not correct (TP needing to file 1040NR to claim NRA spouse’s exemption on HoH return)
#16 clarified “Lived in” choices
#18 updated to add spouse to screen shot

2. Resident or Nonresident?
A resident alien is taxed the same as U.S. citizen – on worldwide income
Nonresident aliens are generally taxed on U.S. income only
NTTC Training – TY2016

3. Who is an Alien?
An alien is any individual who is not a U.S. citizen or U.S. national
A nonresident alien is an alien who has not passed:
The green card test, or
The substantial presence test
NTTC Training – TY2016

4. Who is a U.S. Citizen? An individual born in United States
An individual whose parent is a U.S. citizen
A former alien who has been naturalized as a U.S. citizen
An individual born in a U.S. Territory
NTTC Training – TY2016

5. Who is a U.S. National?
An individual who owes his sole allegiance to the United States, including all U.S. citizens and some individuals who are not U.S. citizens
The term "U.S. National" includes American Samoans or Northern Mariana Islanders who choose not to be U.S. citizens
NTTC Training – TY2016

6. Resident Alien: Green Card Test
A lawful permanent resident of the United States at any time during calendar year
Has or can get a social security number
NTTC Training – TY2016

7. Resident Alien: Substantial Presence Test
Physically present, at any time of the day, in United States for minimum number of days over past three years
NTTC Training – TY2016

8. Substantial Presence Test: Exempt Individuals
Special day-counting rules apply for substantial presence test for:
Foreign government-related person
Teacher or trainee – J or Q visa
Student – F, J, M, or Q visa
Professional athlete
Refer to Pub 4012 Tab L and Pub 519
NTTC Training – TY2016

9. Check the Intake Sheet
NTTC Training – TY2016

10. Resident or Nonresident Alien?
Use Chart in P 4012 Tab L
F, J, M or Q visas require foreign student certification
NTTC Training – TY2016

11. Nonresident Alien Spouse
Treat spouse as nonresident alien on HoH or MFS return
Cannot file Single if lawfully married in any country OR
Elect to treat spouse as resident alien on MFJ return and include worldwide income
Election to treat spouse as resident alien must be made in writing – see Pub 519
Open whether election should be in scope - lsa
NTTC Training – TY2016

12. Head of Household ReturnIF
Taxpayer is U.S. citizen or resident alien for entire year
-AND-
Taxpayer meets all “considered unmarried” requirements to file for HoH with a different qualifying person, except for living apart from spouse
Nonresident spouse chooses not to file MFJ,
Then taxpayer can file as Head of Household
But – cannot claim EIC (both taxpayer and spouse must have valid SSNs)
If the spouse is a nonresident alien, the “living apart” rule does not apply to the taxpayer
NTTC Training – TY2016

13. Nonresident Spouse’s ExemptionIF
Nonresident spouse had no U.S. income
-AND-
Cannot be claimed as dependent on anyone else’s return
Taxpayer provided more than ½ the support
THEN – taxpayer can claim personal exemption for nonresident spouse, if spouse has SSN or ITIN
NTTC Training – TY2016

14. Head of Household Return
Filing HoH and claiming NRA spouse, on Main Info Page:
Must have SSN or ITIN for spouse
TaxSlayer Issue #480
If the spouse is a nonresident alien, the “living apart” rule does not apply to the taxpayer
Checking (c) automatically checks (b) Spouse
NTTC Training – TY2016

15. Dependent’s Exemption
Nonresident alien stepchild is not a dependent unless child is resident of Canada or Mexico
A resident alien stepchild can be a dependent (if tests are met)
Determine residency status first
Dependent must have SSN, ITIN or ATIN
ITIN – individual taxpayer identification number assigned by IRS
ATIN- adoption taxpayer identification number assigned by IRS
NTTC Training – TY2016

16. Child Tax Credit with a Nonresident Dependent?
No – qualifying child for child tax credit must be a U.S. citizen, national or resident
Select Lived in Canada or Lived in Mexico on dependents page, number of months in home – TaxSlayer denies CTC
NTTC Training – TY2016

17. Adopted Dependent’s Exemption
An adopted nonresident alien child is a dependent if he/she lives with taxpayer entire year
Adopted dependent must have SSN, ITIN or ATIN
NTTC Training – TY2016

18. EIC with a Nonresident Spouse?
No – both taxpayer and spouse must be citizens or residents for entire year (even though filing HoH)
In EIC Checklist, check “yes” if spouse is NRA during the year
NTTC Training – TY2016

19. Quality Review
If electing MFJ with nonresident spouse, written election made in prior year or attached?
If MFJ, worldwide income included and correctly converted to U.S. dollars?
If HoH or MFS, spousal exemption properly claimed or not?
No EIC claimed
NTTC Training – TY2016

20. Unique Filing Status
Comments
Questions
NTTC Training – TY2016