Another First Time Home Buyer Tax Credit question

[Questionguy101]

Taxpayer is a US citizen. His spouse came to the US and became resident alien in November 2009. They bought the house in December 2009.

There is a requirement of the FTHB credit that both the taxpayer and spouse cannot be non-resident aliens. So in this case, the spouse was a non-resident alien for 10 months in 2009. But she has already become a resident alien when they bought the house in December 2009. So do they qualify for the FTHB credit?

[Koss]

Yes

Technically, the wife is a dual-status alien. As you noted, she was a nonresident alien for part of the year, and a resident alien for part of the year.

However, there are two different special rules that make this issue go away:

(1) A nonresident alien who is married to a US citizen may elect to be treated as a resident alien for tax purposes, for the entire year, if the couple files a joint return.

(2) Even an unmarried person who is a dual-status alien may elect to be treated as a resident alien for the entire year if they were a resident alien at the end of the year.

This stuff can get really complicated really fast. The election may have to be declared on a statement that is attached to the return (you know, like opting out of the special depreciation).

See Publication 519 for details.

BMK