Claiming a non-resident spouse as a dependent

[Questionguy101]

Publication 17 says: "If you file a separate return, you can claim the exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. This is true even if the other taxpayer does not actually claim your spouse as a dependent. This is also true if your spouse is a nonresident alien."

So if a non-resident alient spouse fulfill all these requirements, how to claim the exemption on the taxpayer's tax return? Does the taxpayer enter the information of the spouse on Line 6C as a dependent?

Also, since the spouse is a non-resident, in order to be eligible as a dependent, does she has to apply for an ITIN?

[Kong]

Questionguy 101

If spouse is from Canada or Mexico, I would file MFJ. Yes you need to apply for Itin.

Lets see how the rest would handle this situation.

[Koss]

Spouse's Exemption

Publication 17 says: "If you file a separate return, you can claim the exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. This is true even if the other taxpayer does not actually claim your spouse as a dependent. This is also true if your spouse is a nonresident alien."

So if a non-resident alient spouse fulfill all these requirements, how to claim the exemption on the taxpayer's tax return? Does the taxpayer enter the information of the spouse on Line 6C as a dependent?

Also, since the spouse is a non-resident, in order to be eligible as a dependent, does she has to apply for an ITIN?

In Pub. 17, immediately above the text you are citing, it says:

"Your spouse is never considered your dependent."

- - - - - - - - - - -

In the context you are describing, your client is not claiming his spouse as a dependent. Your client is claiming his spouse's exemption.

You claim a spouse's exemption in exactly the same place you would claim it on a joint return--on line 6b, next to the box that says "spouse."

In order to claim this exemption, the spouse will need an ITIN. So you would have to attach Form W-7 to the return.

If the spouse already had an ITIN or SSN, the number would be entered in the top right hand corner of Form 1040, in the box that says "spouse's social security number."

And this is how you claim a spouse's exemption, regardless of whether the filing status is MFJ or MFS.

This is very subtle and very technical, but also very important.

There are three types of exemptions.

(i) Personal exemption (line 6a)
(ii) Spouse's exemption (line 6b)
(iii) Dependent exemptions (line 6c)

The authority for these exemptions appears in three totally different sections if the IRC. You cannot "claim yourself" as a dependent. You can claim your own personal exemption, but this does not make you a dependent of yourself. Likewise, your spouse cannot be your dependent.

This is why it is possible, in some situations, for a parent to claim EIC for a 20 year old year full time college student who provided more than half their own support, even though the parent cannot claim the dependent exemption. The student in this scenario does not lose his own personal exemption, even though he is a qualifying child of his mother for EIC.

This is not "double dipping," or "division of benefits." Division of benefits occurs when two people claim the same qualifying child. When the 20 year old claims his own personal exemption, he is not "claiming himself" as a dependent or as a qualifying child. You cannot be a dependent of yourself, and you cannot be your own qualifying child. So the kid is not claiming the same child that his mother claimed.

A personal exemption is not a dependent exemption.

A spouse's exemption is not a dependent exemption, either.

Burton

[Questionguy101]

Thank you.

Based on what you said, I guess they will have to file a joint return in order for the taxpayer to claim the exemption of his non-resident spouse. A 'married filing separate return' will not do it. Am I correct?

[Koss]

Spouse's exemption

Thank you.

Based on what you said, I guess they will have to file a joint return in order for the taxpayer to claim the exemption of his non-resident spouse. A 'married filing separate return' will not do it. Am I correct?

The fact that she is a nonresident alien is totally irrelevant, and it may be confusing you.

Because she is a nonresident alien, she will need to apply for an ITIN in order to file a joint return. But she will also have to apply for an ITIN if he claims her exemption on an MFS return. One issue has nothing to do with the other.

Since she needs an ITIN either way, MFJ may be better because of the higher standard deduction.

There is another option that may be available to him: Head of Household. No ITIN needed for her, if there's a kid in the picture somewhere... but then he doesn't get her exemption.

See Pub. 17, page 23, top of the third column.

Burton M. Koss