I am a french citizen holding a G4 visa via my husband and I am working full time as a contractor. We have two kids. I receive a W-2 form and I filled in the last few years the form 1040NR as married nonresident alien. My husband as working for the World Bank and holding a G4 visa does not pay any federal or state taxes.

Is it correct that I cannot claim exemptions for my children, then I am not allowed to claim for credit for child and dependent care expenses or child tax credit.

MukatA

Is your employer withholding FICA taxes (social security and medicare)?

MireilleB

Yes they are holding FICA and medicare taxes, and retirement plan. I was wondering since I have been in USA since 2001, I should be a residient alien now and not anymore a nonresidient alien and should be able to fill a 1040 form instead of 1040NR. I am a contractor for Kelly Services working at National Instittes of Health, if it can help you

MukatA

G4 visa holder working for an International Organization is exempt from taxes, but if working for other organizations, it is not exempt from taxes.

It appears that your employer was withholding social security and medicare taxes since the day 1. This means that according to the employer the days are not exempt from residency.
So you should have filed as resident (for tax purpose) starting with the second year of your job in the U.S.

In 2007, you must file as resident and as Married Filing Separately. You can't file as Married Filing Jointly as residents because then you will have to report your spouse's income, and it will become taxable.

I am not sure that my conclusion is correct. Let us see what AtlantaTaxExpert has to say.

MireilleB

I think that you are correct. I did mistakes filling 1040NR for so many years.

I always filled married but separatly because my husband working for the World Bank and holding a G4 visa do not report and pay any federal or state taxes. But me I have to report and pay as I am not working for an International Organization!!!!!

AtlantaTaxExpert

MukatA:

Well said; I agree with your conclusions.

MireilleB

I was reading the instruction U.S Tax guide for aliens 2006 publication 519 and it is written page 6 concerning the substantial presence test that you cannot count days for which you are an exempt individual such as members of the immediate family (spouse and kids) of an international organization (such as World Bank); it is under the section foreign government-related individuals.
It means that I will be always a nonresidient alien with my G4 visa and need to fill the 1040NR form?

AtlantaTaxExpert

MireilleB:

May I suggest that you call the IRS International Tax Hotline at 215-516-2000??

The reason is simple: when you started working, I believe you forfeited your exempt status, but I am not sure.

The IRS representatives who answer this hotline may NOT know the answer themselves, but they WILL refer you to someone who DOES know the answer.

Guest11

Dear MireilleB,
I work for the world bank and I have been preparing my taxes for the last 3 years. my wife is on G4 working on a work permit (I assume that you are in similar situation).
For dependents, there is only one option - File married separate 1040NR and you cannot claim dependents.
Please note that if you violate this rule, chances are high that your Work Permit extension will be rejected. You need to furnish proof that you filed in 1040NR to State Department for getting your Work Permit. Hope this helps.

MireilleB

Thank you very much. Since 2001 I have been filling 1040NR married non alien resident and I have never declared by two kids as I know we cannot do anything with G4 visa and work permit....