Does filing as "nonresident alien" for past year cause a problem with pending AOS?

[emrie 10]

So, my husband has been in the US since 2016 on an F-1 Visa, so he's been filing taxes in the US every year as a nonresident alien. In preparation to move his official "residency" to the US, he cashed out his Canadian retirement accounts and has been moving the money to the US. The taxes in Canada for cashing out that money will be worse if he's no longer a resident of Canada, so he was planning to file as a nonresident alien (in the US) again for 2019. (Married, filing separately)

 

We just filed his AOS application a few days ago, in March of 2020. In reviewing the details of the paperwork, he found an note in the instructions for the I-131 (bolding mine):

Quote

If you are an alien who has been admitted as an immigrant or adjusted status to that of an immigrant, and are considering the filing of a nonresident alien tax return or the non-filing of a tax return on the ground that you are a nonresident alien, you should carefully review the consequences of such actions under the INA. If you file a nonresident alien tax return or do not file a tax return, you may be regarded as having abandoned residence in the United States and as having lost your lawful permanent resident status under the INA. As a consequence, you may be ineligible for a visa or other document for which lawful permanent resident aliens are eligible. You may also be inadmissible to the United States if you seek admission as a returning resident, and you may become ineligible for adjustment of status as a lawful permanent resident or naturalization on the basis of your original entry.

Does this refer to filing taxes for the previous year, before he started the adjustment process? Obviously he would file as a resident alien for any year after this one (and we would likely file jointly) but he was trying to wrap up this financial stuff from 2019. At the end of the day, we wouldn't want to jeopardize his status or have him seem to be abandoning his status, that's the top priority, but the text wasn't clear if it referred to only after you'd been given permanent residency/immigration status, or if it would also apply to filing taxes for a preceding year. For the entirety of 2019 he was on an F-1 visa and not (legally) an intending immigrant, although we got married in August.

 

I've scoured these tax forums, but it seems like most people are looking to see if they can file jointly and claim "resident alien" status based on marriage, before anything official has happened. That's kind of the opposite of what we were planning to do. Any idea if this text refers to only after you've gotten your greencard, or if we could jeopardize if he files as nonresident alien for one last tax cycle?

[xyz12345 260]

I'm definitely no expert and don't have your experience. Just want to impart you with this info.

https://www.irs.gov/instructions/i1040nr

 

Your quote seems to refer to the status after AOS or LPR. And based from IRS, your husband is a resident alien if he/you have taken steps already for permanent residency. So resident alien only imo.

 

 

Resident Alien or Nonresident Alien

If you are not a citizen of the United States, specific rules apply to determine if you are a resident alien or a nonresident alien for tax purposes. Generally, you are considered a resident alien if you meet either the green card test or the substantial presence test for 2019. (These tests are explained in Green Card Test and Substantial Presence Test, later.) Even if you do not meet either of these tests, you may be able to choose to be treated as a U.S. resident for part of 2019. See First-Year Choice in chapter 1 of Pub. 519 for details.

Generally, you are considered a nonresident alien for the year if you are not a U.S. resident under either of these tests. However, see Dual-Resident Taxpayer, later, if you are a resident of the United States under these tests but are eligible to claim benefits as a resident of a foreign country under a U.S. income tax treaty.

For more details on resident and nonresident status, the tests for residence, and the exceptions to them, see chapter 1 of Pub. 519.

 

 

 

Closer Connection to Foreign Country

Even though you otherwise would meet the substantial presence test, you can be treated as a nonresident alien if you:

• Were present in the United States for fewer than 183 days during 2019,

• Establish that during 2019 you had a tax home in a foreign country, and

• Establish that during 2019 you had a closer connection to one foreign country in which you had a tax home than to the United States unless you had a closer connection to two foreign countries.

 

You are not eligible for the closer connection exception if you have an application pending for adjustment of status to that of a lawful permanent resident or if you have applied, or have taken steps to apply, for lawful permanent residence. See chapter 1 of Pub. 519 for more information.

You must file a fully completed Form 8840 with the IRS to claim the closer connection exception. See Form 8840 in chapter 1 of Pub. 519. Each spouse must file a separate Form 8840 to claim the closer connection exception.

[jan22 3,052]

Filing the petition was done in 2020, so he does not have to worry about anything for 2019.  

Edited March 7, 2020 by jan22

[Wuozopo 4,293]

2 hours ago, emrie said:

admitted as an immigrant or adjusted status to that of an immigrant,

Your husband was not admitted to the US as an immigrant (and got a greencard)

He did not adjust status (and got a greencard)

The paragraph does not apply to him because he is not an LPR.