What To Do About Substantial Presence?

[thinpea 32]

Hi all! 
 

To start this off I just want to preface by saying my research in the whole tax area has just begun so please be patient with me lol! 
 

I currently am married to a U.S. citizen and am from Canada. We submitted our I-130 in May and it is currently being reviewed. Basically my main question is, if I end up passing the substantial presence test by the end of this year, what would I have to do? 
 

Im trying to avoid it as a whole because it seems quite confusing but I may end up having substantial presence after visiting my husband in the fall and if this ends up being the case I want some what of an understanding on what my next steps would be. 
 

Thank you!! :) 

[P055UM 281]

1 hour ago, thinpea said:

Hi all! 
 

To start this off I just want to preface by saying my research in the whole tax area has just begun so please be patient with me lol! 
 

I currently am married to a U.S. citizen and am from Canada. We submitted our I-130 in May and it is currently being reviewed. Basically my main question is, if I end up passing the substantial presence test by the end of this year, what would I have to do? 
 

Im trying to avoid it as a whole because it seems quite confusing but I may end up having substantial presence after visiting my husband in the fall and if this ends up being the case I want some what of an understanding on what my next steps would be. 
 

Thank you!!

The substantial presence test is one test used to determine whether you are tax resident in the US. If you are tax resident in the US, you would be required to file a tax return. 

 

I’m not sure exactly how much detail you want in answer to your question, but the very short answer is:

* If substantial presence test passed then you are a US tax resident,  and you must be included on a tax return -> either your husband files ‘married filing jointly’ or you both file ‘married filing separately’

* If not a US tax resident -> nothing for you to do -> your husband files ‘married filing separately’ (or he elects to treat you as resident for tax purposes and files MFJ, which is likely to be beneficial from a tax perspective but more burdensome from an admin perspective).

 

Note if you have less than approx $112k of income in Canada this can be excluded from tax even if you do have to file a tax return.

 

https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

[thinpea 32]

On 8/5/2022 at 6:45 PM, AW1704 said:

The substantial presence test is one test used to determine whether you are tax resident in the US. If you are tax resident in the US, you would be required to file a tax return. 

 

I’m not sure exactly how much detail you want in answer to your question, but the very short answer is:

* If substantial presence test passed then you are a US tax resident,  and you must be included on a tax return -> either your husband files ‘married filing jointly’ or you both file ‘married filing separately’

Thank you so much for your answer!

So I will pass the substantial presence if I visit for thanksgiving, after this from my understanding my husband has to file taxes jointly with me (or separately but we would probably do joint) when he files taxes?

Also, my income is less than $112K and I never received any income in the US.

Edited September 6, 2022 by thinpea

[P055UM 281]

5 hours ago, thinpea said:

Thank you so much for your answer!

So I will pass the substantial presence if I visit for thanksgiving, after this from my understanding my husband has to file taxes jointly with me (or separately but we would probably do joint) when he files taxes?

Also, my income is less than $112K and I never received any income in the US.

Yeah, so basically if you have substantial presence, you guys lose the option to just ignore you for US tax purposes. Whereas if you didn’t have substantial presence, you guys could basically choose whether to ignore you or not. But honestly the tax return will be pretty easy if your Canadian income situation is simple. You will need an ITIN though (I think) so it’d be worth researching how to get one of those.

 

Out of interest, how many days did you spend in the US in 2022, 2021 and 2020?

[Wuozopo 4,293]

On 9/6/2022 at 1:18 PM, thinpea said:

Thank you so much for your answer!

So I will pass the substantial presence if I visit for thanksgiving, after this from my understanding my husband has to file taxes jointly with me (or separately but we would probably do joint) when he files taxes?

Also, my income is less than $112K and I never received any income in the US.

There are exceptions to substantial presence. You are just on holiday to the US. You are not on a visa and living in the US. Your tax home is Canada and you have a closer connection to Canada. https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test
 You have no US income. You are not obligated to file a US tax return. Your spouse would file as Married Filing Separately since he is no longer single.

 

But as the spouse of a US citizen, you may file a joint return with him. You will need an ITIN (tax number) since you are not yet eligible for a SSN. You will report worldwide income of the joint filers (his and your Canadian). You will be eligible to include form 2555 with the tax return that excludes your Foreign Earned Income.  He will most likely pay less taxes filing jointly over Married Filing Separately. Who doesn’t want lower taxes?  
 

There are many threads in this tax forum that explain in detail the ITIN process and Form 2555 to exclude your Canadian salary. He can learn the process and do it himself. Does he do his own taxes now?  Since you are able to visit, you can go in person with him next year to an IRS office to get your ID document (passport) certified. 

[P055UM 281]

 

8 hours ago, Wuozopo said:

and you have a closer connection to Canada

Filing I-130 negates closer connection, I believe. 
 

“

Indications of Intent to Change Your Status

If you filed any of the following forms during or before the year in question, this indicates your intent to become a Lawful Permanent Resident of the United States and that you are not eligible for the Closer Connection Exception.

• Form I-508, Waiver of Rights, Privileges, Exemptions and Immunities
• Form I-485, Application to Register Permanent Residence or Adjust Status
• Form I-130, Petition for Alien Relative “