Substantial Presence Test

[Kram BergGold]

My client married a UK citizen in 2012. On Oct 15, 2013 she qualified as a resident alien under the substantial presence test. Does this mean we file them MFS as she needs a dual status return. Or does qualifying on Oct 15 as a resident mean we have to file them MFJ for the whole year? I know we can elect to file them MFJ with her reporting her worldwide income but they want to avoid that if possible.
So my question is, does the qualification as a resident alien back date to Jan 1 or does it start on the day of qualification?

[Koss]

Dual Status

If she chooses MFS, then she can file a dual-status return.

To answer your question, NO, the resident alien status is not retroactive to January 1, unless the taxpayer elects to be treated as a resident alien for the entire year (which you have indicated she does not want to do).

Dual-status returns are Alice-in-Wonderland. You prepare two tax returns. One Form 1040NR and one Form 1040. Somehow they get attached together. I think one of them is the actual tax return, and the other one gets attached as an exhibit or something. I haven't done of these in a loooooong time. But it may well accomplish what she wants. She would only have to report her worldwide income for that portion of the year during which she was a resident alien.

I guarantee it will be one of the weirdest returns you ever prepare. You may have to do it by hand, or with a fill-in PDF. Some tax programs simply don't support it.

Think of it as an individual with a short tax year.

BMK

[Kram BergGold]

Thanks Koss

Thanks Koss

[Gary2]

Note that under the substantial presence test, the first day of residency is her first day present in the US during the year (with some limited exceptions). So in this case, it can't be any later than Sep. 15, and will probably be earlier.