In certain instances, filing your US federal income tax return jointly with your nonresident alien (NRA) spouse can be advantageous given the lower rates that apply to married couple filing jointly.
In this blog, we discuss two methods that are available for filing jointly with your NRA spouse.
Method 1 – A 6013(g) Election
The more common method for filing jointly is found in Section 6013(g) of the Internal Revenue Code.
US taxpayers who are married at the end of their tax year to someone who is not a US citizen or resident can treat their non-resident spouse as a US resident for tax purposes.
For US taxpayers who make this election, the following rules apply:
- Both spouses are treated, for federal income tax purposes, as US residents for all tax years that the election is in effect.
- The spouses must file a joint income tax return for the election year (the spouses can file joint or separate returns in later years).
- Each spouse must report their entire worldwide income for the election year and for all later years unless the election is suspended or terminated.
Taxpayers who want to make this election should attach a statement, signed by both spouses, to their joint return for the election year.
While taxpayers will generally make this election on an original joint return, taxpayers can also make the election by filing an amended joint return within 3 years from the date they filed their original US income tax return or 2 years from the date they paid their income tax for that year, whichever is later. Taxpayers who choose to make this election on an amended return must also amend any returns filed after the election year.
The choice to be treated as a resident alien is suspended for any tax year (after the tax year you made the choice) if neither spouse is a US citizen or resident alien at any time during the tax year.
Once made, the election to be treated as a US resident for federal income tax purposes applies to all later years unless terminated in one of the following ways:
- Revocation by either spouse
- Death of either spouse
- Legal separation
- Inadequate records
If the election is terminated for any of the above reasons, neither spouse can make this choice in any later tax year, even if married to a different individual. This is a once-in-a-lifetime election.
Terminating the election can also have collateral tax implications, so caution should be used. For instance, under proposed regulations, a gift of a PFIC to a spouse is generally subject to PFIC taxation, unless the giftee spouse is a US person or an NRA who is treated as a US resident by virtue of a 6013(g) election. However, terminating the election triggers PFIC taxation at the point of termination.
Method 2 – A 6013(h) Election
The less common method is found in Section 6013(h) of the Code.
If you are a dual-status alien (i.e., you’ve been both a US resident and a nonresident in the same tax year), you can choose to be treated as a US resident for the entire year if all of the following apply:
- You were a nonresident alien at the beginning of the year.
- You are a resident alien or US citizen at the end of the year.
- You are married to a US citizen or resident alien at the end of the year.
- Your spouse joins you in making the choice.
This includes situations in which both you and your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year.
The choice is made by attaching a statement signed by both spouses to your joint return for the year of the choice.
As a result of your election, you and your spouse are treated as US residents for the entire year for income tax purposes. You and your spouse must file a joint return for the year of the choice. Neither you nor your spouse can make this choice for any later tax year. Meaning, it’s a one-time choice.
