Filing 1040NR as a Nonresident

[Spoom 8]

As you can see from my timeline, I am a Canadian citizen, and moved to the US on 11/22/2009 on a K-1 (nonimmigrant) visa.

We married in January and started the AOS process in February.

Days in the US in 2009: Approximately 80.

Days in the US in 2008: Approximately 45.

Days in the US in 2007: Approximately 10.

80 + (1/3)45 + (1/6)10 = ~97.

According to this, I don't meet the substantial presence test to be considered a "resident alien" for tax filing purposes, meaning that I would be considered a nonresident for all of 2009 (or so I've been told by the advanced tax law division of the IRS when I called).

None of my income is US-sourced, it's all from Canadian clients earned while in Canada.

The guy at the IRS said because of these two facts, I could even get away with not filing, and I certainly don't have to file a 1040 other than a 1040NR.

So my question is, what should I do here? I've read somewhere that filing as a nonresident is detrimental to your immigration status, or could be brought up at my removal of conditions down the road (or even for my pending AOS). Am I just being paranoid? Should I file a 1040NR or simply not at all?

[Spoom 8]

Whoops, missed the tax thread. Mods, feel free to merge if you want.

[Brother Hesekiel 2,236]

So far you are not a resident per se. Thus, technically, you are allowed to file the 1040NR. Now let's find out if you want to, shall we?

1) I assume your US citizen spouse is filing their taxes?

2) Is he or she filing as "married?"

3) If you guys were to file jointly, wouldn't the tax burden be lower?

What I'm trying to get at: what is the advantage for you, as a married couple, if you file separately as a nonresident?

I'd guess, only a tax professional will be able to answer that satisfactory.

[darkchilde794 5]

But they weren't married in 2009, they were married in 2010. I think that is why he is asking if he should file for a 1040NR...

[Wishing 1]

I thought it all depended on what date you adjust your status. As the substantial presence test is nil as soon as you apply for permanent residency.

"An alien may become a resident alien by passing either the green card test or the substantial presence test as explained below."

http://www.irs.gov/businesses/small/international/article/0,,id=129390,00.html

(this is listed here in the business section...but I'm quite sure it applies to individuals too...)

So if you did not adjust your status until 2010, it is possible you may be filing 2009 as NR.... Then 2010 would be different...and 2010 would assumably then be your LAST tax year in Canada, if you "cut ties to Canada", as per CRA.

I actually went to H&R Block in Canada and they told me about these. If you go to an H&R Block in US for advice make sure it is one of the prestige or "elite" places....so the H&R Block person told me in Canada. Apparently the regular offices can be not as good in US.

[Spoom 8]

Yeah, to clarify, I am filing 2009 taxes (if I do file them) as single since I was not married as of December 31, 2009. Married filing jointly is obviously not an option.

I am currently still pending AOS. I filed for AOS in February of 2010, making me a technical nonimmigrant (the K-1 is a nonimmigrant visa) through all of 2009. Thus, the green card test doesn't apply, and I ran the numbers for the substantial presence test (see original post) and it shouldn't apply either. Keep in mind I'm just getting used to US tax laws so I may be missing something here.

I think I'm going to owe the IRS $0 either way; I just want to make sure that neither USCIS nor the IRS is going to have a tantrum over me either not filing, or filing as a nonresident for part of my time here. Can someone answer that part for me? I'm going to look at the I-751 instructions as well to make sure.

Also, we're all reasonably sure I don't need to file a normal 1040 or 1040EZ, right? I'm also still wondering if I should file at all; is a letter with my removal of conditions stating that I was a technical nonresident with zero US-source income good enough or would filing a $0 return be better? Is this likely to have any impact on my pending AOS?

Edited April 15, 2010 by Spoom

[Spoom 8]

And now I see this USCIS law interpretation.

Now, it does say: "Effect of claim of nonresident alien status for income tax purposes upon prior lawful admission for permanent residence". But then later on:

(2) An immigrant admitted to the United States for permanent residence, or an alien whose status is adjusted to that of a permanent resident, who upon admission or adjustment intends to and does establish residence in the United States, is automatically classified under the income tax laws and regulations as a resident alien. Such an alien retains his resident alien status until such time as he voluntarily elects to claim nonresident alien status under the tax laws and regulations.

Those two statements seem to be in conflict, since an alien lawfully admitted for permanent residence (i.e. an immigrant visa holder) gets an I-551 LPR stamp immediately and a green card in the mail, whereas a nonimmigrant dual-intent visa holder like myself with the K-1 has to adjust later, and it doesn't say that the adjustment necessarily has to happen in the tax year in question. Can anyone shed some light on this?

Also, it's 2 AM and I'm going to bed. Thank you, automatic extension.

Edited April 15, 2010 by Spoom

[darkchilde794 5]

Well the good news is, apparently you can file for a 6 month extension Not sure if it applies to you but I've been informed by 3 morning television shows that the IRS is extending the return deadline to 6 months.

[payxibka 10,045]

Since you are not yet a resident alien for tax purposes and none of you income is US based, then you are not required to file anything with the US Government. If you did indeed were a non-resident alien and did have US based income then the 1040NR would be appropriate.

[mikey78 6]

I POE-d in the beginning of November 2009 and since then I am LPR so I was curious what I was supposed to do with the Nov and Dec 2009 tax-wise. This is what IRS told me: after running a battery of questions they determined that for tax purposes in 2009 I have a dual resident status (Canada/US) and since I didn't make any money after I moved to the US in Nov and Dec 2009 (i.e. I had no income) therefore I don't have to file anything...