NRA Spouse and NRA Child

tsuchiya · Post by **tsuchiya** » Sat Dec 18, 2010 7:00 am

I am holding TN-1 working in US. I have a NRA spouse and a NRA child (currently live in Canada). Most of my wages go to my spouse and my child. So my question is:

- Can I claim my spouse's exemption?
- Can my child qualify as a dependent?

Thanks.

nelsona · Post by **nelsona** » Sat Dec 18, 2010 8:23 am

Yes and Yes, on your 1040 or 1040-NR. They will both need ITIN's which you can get by filing a w-7 for them with your return.

Are you climing Cdn residency or non-residency?

nelsona · Post by **nelsona** » Sat Dec 18, 2010 8:25 am

It has nothing to do with whether you support them or not. Cdn resident dependents are treated "as if" they were in US for exemption purposes.

tsuchiya · Post by **tsuchiya** » Sat Dec 18, 2010 11:56 am

Nelsona, thanks for your response.

I am a Canadian citizen and have never claimed as non-residency since I started working in US. I report my income to CRA every year. My spouse and child are Canadian citizens.

As for filing US tax return, I suppose I need to file MFS. You mentioned 1040NR. Is this the form for my spouse and child to claim their exemption? My spouse doesn't have any US source of income, but she has Canadian income. Do we have to report her non-US source of income to IRS if I claim her exemption?

Also, since my NRA spouse and child are qualified for exemption and dependent,
- can I enter my spouse and dependent in line C and in line D, on the W-4 form (Employee's Withholding Allowance) so that less amount will be withheld on my paycheck?
- Is my child qualified for Child Tax Credit (line G)?

Thanks.

nelsona · Post by **nelsona** » Sat Dec 18, 2010 8:35 pm

If you continue to file in canada, then you should be filing 1040NR in US, and you report only YOUR US income, and still claim them as dependent.

Of course, since you file in canada as well, it really doesn't matter if you save US tax, since you will just end up paying more in canada.

You can put whatever you want on W-4. the tax withheld is not your fina; tax. you should make it as small as you can. I wouldn't worry too much about it.

nelsona · Post by **nelsona** » Sat Dec 18, 2010 8:36 pm

But if you live and work in US, and visit Canada raely, you can claim non-residency if you wsh. it could ave you taxes overall.

tsuchiya · Post by **tsuchiya** » Sun Dec 19, 2010 5:59 pm

Hi Nelsona,

I am a little confused now.

1. Although I am still paying tax to CRA every year (which I suppose I am still considered as resident of Canada), I am US resident as I work and live in US for few years already. SO, how can I file 1040NR (which is for Nonresident alien)? Last time I filed MFS.

2. If I file MFS, can we still claim my spouse's exemption and child as dependent?

3. You mentioned that if I live and work in US, and visit Canada rarely, I can claim non-residency if I wish. I though about it... however, since I still have residential ties to Canada (my spouse and child), How can I claim non-residency?

4. One more questions, is my child qualified for Child Tax Credit?

Thanks.

nelsona · Post by **nelsona** » Mon Dec 20, 2010 6:45 am

1. How you file in UD is not always an indication of residence. You can file in many acceptable ways in US. The fact that you still end up paying tax in canada illustrates my point about it being unimportnat to reduce US tax, since it will simply mean more tax in canada.

2. I'll let you determine that. Your Cdn dependants are treated the same as US dependants.

3. The treaty definition of residence over-rides bith CRA and IRS rules, at it really only allows for being resiIf you are Cdnbdent of one country in the end. In my opinion, you are US resident. and have been since theday you took on this job.. But if you say you are CDn resident, and can prove this to US, then you could have filed 1040NR all along, and report US inomce only on a 1040NR. This only become an issue if you would pay less taxes in canada than US.

4. If you are Cdn resident. If not, your spouse's return will be used to determine this. But, in my opinion, you are paying extra Cdn tax jus tto collect CCTB, which is probbaly less.