Canadian TN Visa holder working in US and wife has TD Visa. Need help on filing taxes.

[gdclaura]

Hello all,

I'm a Canadian citizen on a TN Visa and my wife is a Canadian Citizen on a TD Visa. We moved to the US on July 2018 and have gone back to Canada multiple times since then. I added up the days and we don't meet the Substantial Presence Test therefore we would need to file as non-resident aliens. (We're trying to avoid filing as Dual-Status Aliens)

2018 TAX YEAR
1. From what I've learned, we will need to file our taxes in the US (declaring only US income) and then file taxes in Canada (declaring Canadian Income + US income) with the credit that we got from filing US taxes. Can we file at the same time in both countries or will we need to wait for the result of our US filing before doing the Canadian filing?

2. Initially, I though that we could file jointly as non-resident aliens, but according to the forum and other online sources, we would need to file separately. Is this true? Does this mean that my wife and I will need fill up SEPARATE 1040NR forms?

3. My wife doesn't have an ITIN yet and has no US income, will she still need to file? Also, so that she can get her ITIN? If so, do we just put blanks on the numerical portion of the 1040NR form and attach a completed W7 form?

4. From what I know, we only have to fill up 1040NR forms and a W7 form. Please advice if there are other forms to fill up and if there are other things that I'm missing from above.

2019 TAX YEAR
5. We own a home in Canada and have recently started renting it out. I'm assuming that we're still going to be treated as non-resident aliens in the US because of our residential ties to Canada (we own a home, vehicles, driver's licenses and bank accounts in Canada). For the 2019 Tax Year, do we do the same thing (file only US income in the US and file both US+CDN incomes in Canada)? Or will we need to add the rental income to our US taxes?

Sorry for the long post. It's been a headache trying to figure this out for the past week now. Any help will be greatly appreciated!

[nelsona]

1. Correct.
2. There is no joint 1040NR, and thus you would be taxed at higher rate. You have 2 other options: file a 1040NR using the XXV(2) provision of treaty (I have explained in other posts here sufficiently), or elect to file as full year 1040 residents, exempting income previous you your move.
3. ITINs are issued with form W-7 when she file, or you file jointly.
4. Correct
5. Incorrect. You are living in US, a rented house is not a residential tie, and even if you left it empty, you are living in US as residents. You must have your rent taxed each month and withheld at 25% since you are non-resident.