Can a Non-Resident Alien File Jointly?

Navigating U.S. tax obligations can be complex, particularly for individuals who are not U.S. citizens or permanent residents. This article provides insights into tax filing for non-resident aliens, focusing on the specific circumstances under which they may file a joint tax return. Understanding these tax rules is important because they differ significantly from those applicable to U.S. citizens and resident aliens.

Understanding Tax Filing Status for Non-Resident Aliens

A non-resident alien is generally defined by the Internal Revenue Service (IRS) as an individual who is not a U.S. citizen and does not meet either the “green card test” or the “substantial presence test.” The green card test is met if an individual has been admitted as a lawful permanent resident under U.S. immigration laws at any point during the calendar year. The substantial presence test involves a calculation of days physically present in the U.S. over a three-year period, including at least 31 days in the current year and 183 days over the three-year period, counting all days in the current year, one-third of the days in the first preceding year, and one-sixth of the days in the second preceding year.

Non-resident aliens generally cannot file a tax return jointly with a spouse. If a non-resident alien is married to another non-resident alien, they typically file as Married Filing Separately. If a non-resident alien is married to a U.S. citizen or resident alien and no special election is made, the non-resident alien spouse generally files as Married Filing Separately.

Non-resident aliens are usually taxed only on their U.S.-source income, which includes income effectively connected with a U.S. trade or business and certain fixed, determinable, annual, or periodical (FDAP) income. They generally file Form 1040-NR or 1040-NR-EZ. This contrasts with U.S. citizens and resident aliens, who are subject to U.S. taxation on their worldwide income.

Electing to File Jointly with a Resident Spouse

There is a specific election that permits a non-resident alien spouse to be treated as a resident alien for tax purposes, thereby allowing joint filing with a U.S. citizen or resident alien spouse. This election is available if, at the end of the tax year, one spouse is a U.S. citizen or resident alien, and the other spouse is a non-resident alien. By making this election, the non-resident alien spouse is considered a U.S. resident for all federal income tax purposes.

A significant implication of this election is that the non-resident alien spouse’s worldwide income becomes subject to U.S. taxation, just like a U.S. citizen or resident alien. This change in tax liability is a primary consideration when deciding whether to make this election.

Electing to file jointly can offer potential benefits, such as eligibility for certain deductions, credits, or lower tax brackets that might not be available when filing separately. For example, filing jointly can sometimes result in a lower overall tax liability for the couple compared to filing separately, depending on their combined income and deductions. However, the trade-off is the expanded tax base to include worldwide income, which can significantly increase the non-resident alien spouse’s U.S. tax obligations.

Steps to Make the Joint Filing Election

To make the election, specific procedural actions must be taken. In the first year the election is made, the couple must attach a statement to their jointly filed tax return. This statement serves as a declaration that one spouse is a non-resident alien and the other is a U.S. citizen or resident alien, and that both choose to be treated as U.S. residents for tax purposes.

The statement must include certain information for both spouses, such as their names, addresses, and Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs). Both spouses are required to sign this statement, indicating their mutual consent to the election. The tax return filed after making this election is Form 1040.

If the non-resident alien spouse does not have an SSN, they must obtain an ITIN. An ITIN is a tax processing number issued by the IRS for individuals who are not eligible for an SSN but are required to have a U.S. taxpayer identification number for tax purposes. To apply for an ITIN, the non-resident alien spouse must submit Form W-7, Application for IRS Individual Taxpayer Identification Number, along with required identification documents and the original tax return for which the ITIN is needed. This ITIN application must be processed before the joint return can be fully processed.

Once the election has been made for the first year, it remains in effect for all subsequent tax years unless it is terminated. For subsequent years, the couple simply files a joint tax return (Form 1040) without needing to re-attach the statement of election. The non-resident alien spouse continues to be treated as a resident alien for all federal income tax purposes as long as the election remains active.

Terminating the Joint Filing Election

The election can be terminated either voluntarily or automatically due to certain events. Voluntary revocation of the election can be done by the couple. This requires them to file a statement with the IRS indicating their intent to revoke the election, typically by the due date of their tax return for the year of revocation.

There are several automatic termination events that will end the election without any action required by the taxpayers. One such event is the death of either spouse. If either the U.S. citizen/resident alien spouse or the non-resident alien spouse dies, the election terminates at the beginning of the tax year following the year of death. Another automatic termination occurs upon legal separation or divorce. If the couple becomes legally separated or divorced, the election terminates at the beginning of the tax year in which the legal separation or divorce occurs. Additionally, the election automatically terminates if the couple fails to file a joint return for two consecutive tax years after the election was initially made. Upon termination, the non-resident alien spouse reverts to their original non-resident alien tax status, meaning they would generally be taxed only on U.S.-source income and would typically file Form 1040-NR in subsequent years.