US tax - can I decide NOT to list NRA spouse as exemption?

M. Ploymi · #1 11.03.2018, 22:27

Hi there, a potentially very silly question:

My wife is a non-resident alien (NRA) with no SSN/ITIN. Because of our son, I am filing as Head of Household.
I understand that listing her as an exemption would knock off $4,050 from my income. However I do not earn enough income to be taxed, so that's of little relevance to me.
Is it an obligation to list her as an exemption (which would then require her to apply for an ITIN), or can I choose to "opt out" thereby removing the need for an ITIN?

Thanks!

runningdeer · #2 12.03.2018, 00:23

You are a bit confused about the concept, you basically have two options:

File as head of household (if qualifying dependent) in this case child, and take the exemption for yourself and maybe also child if US person

File as married filing jointly, take exemption for yourself and spouse, and possibly child, BUT you have to include your spouses worldwide income.

Another possibility is married filing separately but with child giving head of household this is probably not desirable.

So if you want to take the exemption for spouse, need to treat the NRA as a US person and include all her income. Rarely worth it plus all the hassle if she has income.

M. Ploymi · #3 12.03.2018, 07:28

Thanks for your reply, runningdeer.

I think there is also a third option, which is 'married filing separately' and in both cases (MFS and HoH) I could take an exemption for my spouse.

	Quote:
	Separate return. If you file a separate return, you can claim an exemption for your spouse only if your spouse: Had no gross income, Isn't filing a return, and Wasn't the dependent of another taxpayer. You can claim an exemption for your spouse even if he or she is a nonresident alien. In that case, your spouse: Must have no gross income for U.S. tax purposes, Must not be filing a return, and Must not be the dependent of another taxpayer. Head of household. If you qualify for head of household filing status because you are considered unmarried, you can claim an exemption for your spouse if the conditions described in the preceding paragraph are satisfied. To claim the exemption for your spouse, check the box on line 6b of Form 1040 or Form 1040A and enter the name of your spouse in the space to the right of the box. Enter the SSN or ITIN of your spouse in the space provided at the top of Form 1040 or Form 1040A. https://www.irs.gov/publications/p501

That aside, it seems like what you are saying is that it is acceptable to elect NOT to list her as an exemption in order to avoid obtaining an ITIN.

RunnerGirl · #4 18.03.2018, 18:02

I'm still relatively new here but was looking up some stuff related to taxes for this year's US tax return, came across this & realized I can actually contribute something... Finally!

I tried to take my NRA spouse as en exemption last year (Married, filing separately, no children, spouse has no SS# or ITIN). I couldn't find any reason that stated clearly in any IRS publication that I could not.

The IRS dis-allowed it & sent me a correction. I called & they explained that they will only allow the exemption if the spouse has a SS# or ITIN. So they force you to get the SS# or ITIN to benefit from the credit. For us, the amount of the credit is not worth the other things that come along with a SS# or ITIN, so we'll continue to do without the exemption in the future. There is no issue with doing so & I have friends here who have done this for years with no issue.

M. Ploymi · #5 01.04.2018, 15:34

Thanks RunnerGirl! Much appreciated.

I'm curious about one thing. You wrote "not worth the other things that come along with a SS# or ITIN" - what are those things, in your view?