Tax Return for N-400

[HarryWL 262]

So I've kinda dug myself into a rabbit hole on the IRS tax rules and I'm looking to find some clear clarification. My permanent residence started on December 18th 2018, I had a restricted authorization SSN card from previously working in the US in 2015-2016 and had that removed in January 2019. So I never filed a tax return as I didn't have any income for those 13 days. My ex husband, I assumed, would have filed me as a dependent, but I don't believe that to be the case anymore. (I think he claimed his father instead). I was a resident of Canada for 11 and a half months of the year, and filed my tax return in Canada. 

 

On the IRS website it talks about "establishing a closer connection" (for different country when it comes to filing taxes) and "indications of intent to change status". It says "if you filed Form I-130 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". 

 

Long story short, I have my tax transcripts for 2019-2022 (4 Years) and I don't have one for 2018, I already applied for my citizenship and I said I didn't fail to file a tax return, because to my understand I didn't know I needed to. (Honestly I still don't know). 

 

Can someone please advise, and has anyone been in a similar situation where their PR was approved at the very end of the tax year? 

 

Thank you

 

 

Edited September 20, 2023 by HarryWL
tweak

[OldUser 6,629]

Even if you were a LPR for 1 day in 2018, you needed to file taxes for 2018.

 

I believe you can still file it. I also believe you may have exclusions for your income for the part of the year you weren't a LPR.

[HarryWL 262]

43 minutes ago, OldUser said:

Even if you were a LPR for 1 day in 2018, you needed to file taxes for 2018.

 

I believe you can still file it. I also believe you may have exclusions for your income for the part of the year you weren't a LPR.

 

Would filing it now cause any issues when it comes to my interview?

[OldUser 6,629]

Just now, HarryWL said:

 

Would filing it now cause any issues when it comes to my interview?

No, it shouldn't be a problem. You can always explain it to the officer, saying you weren't aware of requirement to file, and once you learned you filed taxes for 2018.

[HarryWL 262]

43 minutes ago, OldUser said:

No, it shouldn't be a problem. You can always explain it to the officer, saying you weren't aware of requirement to file, and once you learned you filed taxes for 2018.

 

I feel the hard part now is figuring out how to actually go about getting past the bureaucratic hurdles. Even my Canadian tax return for 2018 wasn't finished till this year, they lost in 3 times because they forced me to mail it and wouldn't accept it electronically, then when they finally received it, it took them another 10 months to process. 

 

Some of the websites don't process 2018 forms anymore, so I might have to figure out how file a paper copy and then go about the whole double taxation treaty stuff. Only in America would they make it this difficult. 

 

 

[Mike E 11,739]

1 hour ago, HarryWL said:

Some of the websites don't process 2018 forms anymore, so I might have to figure out how file a paper copy and then go about the whole double taxation treaty stuff. Only in America would they make it this difficult. 

Freetaxusa.com

 

If you claim the foreign income exclusion in 2018, you might run afoul of the continuous residence requirement:

 

https://www.uscis.gov/policy-manual/volume-12-part-d-chapter-3

 

Other examples that may raise a rebuttable presumption that an applicant has abandoned his or her LPR status include cases where there is evidence that the applicant voluntarily claimed "nonresident alien" status to qualify for special exemptions from income tax liability or fails to file either federal or state income tax returns because he or she considers himself or herself to be a "nonresident alien

 

So instead of filing N-400 90 days before 2023-12-18, I would file 90 days before 2024-01-01.  Or better yet, not file until  you filed your 2023 taxes.   That way only your 2019, 2020, 2021, 2022, 2023 tax returns need to be submitted as evidence.

Edited September 20, 2023 by Mike E

[HarryWL 262]

5 hours ago, Mike E said:

Freetaxusa.com

 

If you claim the foreign income exclusion in 2018, you might run afoul of the continuous residence requirement:

 

https://www.uscis.gov/policy-manual/volume-12-part-d-chapter-3

 

Other examples that may raise a rebuttable presumption that an applicant has abandoned his or her LPR status include cases where there is evidence that the applicant voluntarily claimed "nonresident alien" status to qualify for special exemptions from income tax liability or fails to file either federal or state income tax returns because he or she considers himself or herself to be a "nonresident alien

 

So instead of filing N-400 90 days before 2023-12-18, I would file 90 days before 2024-01-01.  Or better yet, not file until  you filed your 2023 taxes.   That way only your 2019, 2020, 2021, 2022, 2023 tax returns need to be submitted as evidence.

 

I already submitted my N-400 yesterday, I probably shouldn't have jumped the gun so fast. I guess best case it could take longer to process and I'll be able to file my taxes hopefully around mid February after I get my 1099. (I should have my singular W2 by this point too). Knowing my luck though, despite my ROC already pending for 3 years, this process will go a lot quicker. I did already have a look at freetaxusa.com but there wasn't really any questions directly relating to foreign income, would it be on a separate document? 

 

Seems a bit like a catch 22 with regards to filing the 2018 return with the foreign income exclusion and establishing the technical residence marker. I looked at my Canadian return and I made less than $20k USD for that year, but if I don't use the foreign income exclusion, I could still end up having to give them around $1,000. (Which seems pretty ridiculous to me). Either way it would be a lose-lose. 

 

Best option seems to be filing the 2018 return with the foreign income exclusion, and hoping that the process takes closer to 7-8 months rather than 3-4 months so that I'll be able to have the 5th tax return in hand. What do you think? 

 

Edited September 20, 2023 by HarryWL

[Mike E 11,739]

2 hours ago, HarryWL said:

could still end up having to give them around $1,000

Yeah social security taxes are shockingly high compared to CPP, so at that income level, Canada has lower taxes and so the IRS foreign income tax credit does not help you.

 

So how did you answer these?

 

Have you EVER not filed a Federal, state, or local tax return since you became a lawful permanent resident?

If you answered "Yes," did you consider yourself to be a "non-U.S. resident"?

 

Have you called yourself a "non-U.S. resident" on a Federal, state, or local tax return since you became a lawful permanent resident?
 

?

Edited September 20, 2023 by Mike E

[beloved_dingo 1,976]

17 hours ago, HarryWL said:

So I've kinda dug myself into a rabbit hole on the IRS tax rules and I'm looking to find some clear clarification. My permanent residence started on December 18th 2018, I had a restricted authorization SSN card from previously working in the US in 2015-2016 and had that removed in January 2019. So I never filed a tax return as I didn't have any income for those 13 days. My ex husband, I assumed, would have filed me as a dependent, but I don't believe that to be the case anymore. (I think he claimed his father instead). I was a resident of Canada for 11 and a half months of the year, and filed my tax return in Canada. 

 

On the IRS website it talks about "establishing a closer connection" (for different country when it comes to filing taxes) and "indications of intent to change status". It says "if you filed Form I-130 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". 

 

Long story short, I have my tax transcripts for 2019-2022 (4 Years) and I don't have one for 2018, I already applied for my citizenship and I said I didn't fail to file a tax return, because to my understand I didn't know I needed to. (Honestly I still don't know). 

 

Can someone please advise, and has anyone been in a similar situation where their PR was approved at the very end of the tax year? 

 

Thank you

 

 

I just want to make sure that this is covered - do you know how your ex-husband filed the 2018 taxes? Because if he filed married filing jointly in 2018,then your 2018 taxes were filed.

 

I'm assuming you don't see a 2018 tax transcript when you log in to the IRS website, but I also believe they recently started only showing the last 4 years (just checked my account and only have 2019 - 2022 available). I would absolutely try and verify this before doing anything else, because legally your ex had to file as either married filing jointly or married filing separately. 

Edited September 20, 2023 by beloved_dingo

[HarryWL 262]

5 hours ago, beloved_dingo said:

I just want to make sure that this is covered - do you know how your ex-husband filed the 2018 taxes? Because if he filed married filing jointly in 2018,then your 2018 taxes were filed.

 

I'm assuming you don't see a 2018 tax transcript when you log in to the IRS website, but I also believe they recently started only showing the last 4 years (just checked my account and only have 2019 - 2022 available). I would absolutely try and verify this before doing anything else, because legally your ex had to file as either married filing jointly or married filing separately. 

 

I'm almost 99.9% positive now he filed married filing separate, because he didn't have any of my T4 (W2 equivalent) documents from Canada, if that was a requirement for him to include in a potential joint filing. I had to push him to file a joint tax return for one of the subsequent years.

[HarryWL 262]

12 hours ago, Mike E said:

Yeah social security taxes are shockingly high compared to CPP, so at that income level, Canada has lower taxes and so the IRS foreign income tax credit does not help you.

 

So how did you answer these?

 

Have you EVER not filed a Federal, state, or local tax return since you became a lawful permanent resident?

If you answered "Yes," did you consider yourself to be a "non-U.S. resident"?

 

Have you called yourself a "non-U.S. resident" on a Federal, state, or local tax return since you became a lawful permanent resident?
 

?

 

Sorry I was working all day so I didn't have a chance to respond. 

 

To the first comment, I did the calculations based off IRS exchange rates for past years, and my income would have only been 19.4k USD and I paid $2,200 in taxes. Compared to if I had earned that amount in the US, I feel like I got taxed at a higher rate in comparison, so a foreign income tax would wipe any potential amount owed? 

 

So I answered no to the 3 questions on the basis that I was under the impression I wasn't required to file a tax return for 2018 because my residence was less than 31 days, and I was only considered a permanent resident for 13 days. The Canadian government recognized me as a resident for 352 calendar for tax purposes. My Canadian taxes were also messy, having to file 3 times due to them losing them twice and Canada didn't actually issue a notice of assessment till September 2022. (Which I paid the balance, but I'm currently disputing late fees because of their mistakes). 

 

I had no employment for those 13 days, and my social security card  showed restricted authorization from a previous visa and wasn't fixed till January (after the holidays and into a new tax year). On my part, I can see now how that could assume ignorance rather than willful avoidance. There's a likelihood I'll have my 2023 return before my interview which I could use as my 5th year, but that doesn't resolve the issue of the 2018 return, or how I answered the N-400 questions. 

 

 

Edited September 21, 2023 by HarryWL

[Mike E 11,739]

44 minutes ago, HarryWL said:

US, I feel like I got taxed at a higher rate in comparison, so a foreign income tax would wipe any potential amount owed? 

Ok cool. I was counting foreign earned income as self employment income subject to 15.3 percent SE tax, but I would also credit the unseen employer  contribution  of CPP tax since that is a tax that depresses wages of T-4 jobs in Canada as the SS employer contribution for W-2 jobs  does in the US  

 

So maybe it washes out at $20K USD.

[Mike E 11,739]

50 minutes ago, HarryWL said:

So I answered no to the 3 questions on the basis that I was under the impression I wasn't required to file a tax return for 2018 because my residence was less than 31 days, and I was only considered a permanent resident for 13 days

Ok, I think you need to fike an amendment to your N-400 and an IRS tax return for that year

[HarryWL 262]

Just now, Mike E said:

Ok, I think you need to fike an amendment to your N-400 and an IRS tax return for that year

 

Would I have to pay the fee again? 

 

Quote

If you claim the foreign income exclusion in 2018, you might run afoul of the continuous residence requirement:

 

Also if I did both an amendment and filed the 2018 return, do you see this being an issue with the continuous residence requirement?

 

Thank you for your help, I really appreciate it. 

[Mike E 11,739]

53 minutes ago, HarryWL said:

 

Would I have to pay the fee again?

no. Just write a letter stating you want to amend your answer(s)

 

53 minutes ago, HarryWL said:

Also if I did both an amendment and filed the 2018 return, do you see this being an issue with the continuous residence requirement?

I see no issue if you cure all this before your interview.

Edited September 21, 2023 by Mike E