CDN Greencard Holder & CDN Citizen Marriage 2017

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Protazoid
Posts: 9
Joined: Wed Oct 01, 2014 6:44 am
Location: United States

CDN Greencard Holder & CDN Citizen Marriage 2017

Post by Protazoid » Sun Mar 04, 2018 9:56 pm

Hello,

I have reviewed some topics on this forum and want to clarify if this tax strategy is viable.

Situation:
*Spouse 1: US Resident since 11/2012, CDN citizen with green card
*Spouse 2: CDN Resident and citizen, no SSN/ITIN, has significant education tax credits (No tax payable this year)
*Maried in 2017


Tax Plan:
*Spouse 2 files canada tax, reports Spouse ww income, claims education tax credits
*Spouse 1 claims treaty benefits, files joint 1040 for whole year, claims exemption for Spouse 2, excludes foreign income with form 2225, attach form w7 for ITIN

Assuming this is valid, do I need to attach an addendum or write something on return indicating treaty benefits like when filing dual status return?

Thanks for help, your website is amazing resource.

Protazoid
Posts: 9
Joined: Wed Oct 01, 2014 6:44 am
Location: United States

Post by Protazoid » Sun Mar 04, 2018 10:48 pm

Did some more research, I think we would need to attach form 8833 and say we are using section XXV of US Canada tax treaty.

Basically we just need to explain it allows us to treat spouse 2 as if she were a us citizen for taxation purposes.

Protazoid
Posts: 9
Joined: Wed Oct 01, 2014 6:44 am
Location: United States

Post by Protazoid » Sun Mar 04, 2018 11:14 pm

Did some more research, I think we would need to attach form 8833 and say we are using section XXV of US Canada tax treaty.

Basically we just need to explain it allows us to treat spouse 2 as if she were a us citizen for taxation purposes.

nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Sun Mar 04, 2018 11:15 pm

Couple of questions:
1, Where do you live and when or did you move?

There is no need to claim a treaty benefit to file joint in US. All spouses of US residents can do this.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

Protazoid
Posts: 9
Joined: Wed Oct 01, 2014 6:44 am
Location: United States

Post by Protazoid » Mon Mar 05, 2018 12:32 am

I live in Texas. She still lives in Canada while we wait for immigration to go through. I haven’t moved.

I know we can file jointly, but I wasn’t sure if she would be entitled to the foreign income exclusion as a non-citizen without claiming treaty benefits.

It would be preferable to exclude income rather than claim the foreign tax credit because our US tax rate would be much higher than her Canadian one, and we want to leverage her education credits.

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Mon Mar 05, 2018 9:20 am

Regardless of nationality or residence, she can use 2555 on her wages if she meets PPT (330 days out of US in 2017).

If not, then, yes, I would agree that she would need to use the treaty to use 2555.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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