I am a U.S. citizen. My wife is a permanent resident. Her children (under 18) are still in South Korea and we are in the process of bring them here. We support them 100%. Of course they do not have SSN#. Can we deduct them as dependents? Thanks in advance for your answers.

MukatA

A dependent must be citizen or resident of the U.S. So to claim them dependents in 2008, they must be in the U.S. for some part of 2008.

mack20007

That answer is not fully correct:

The IRS rules actually state:

"You can also claim exemptions for individuals who qualify as your dependents. To be your dependent, the individual must be a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico for some part of the calendar year in which your tax year begins".

By this, they don't mean the dependent has to be "physically" preseint in the US at some time during the year. When they use the term "resident for some part of the calendar year", they mean by meeting the definition of a resident or a citizen, or a national individual.

That is, if you and your child are US citizens and you move to Europe for two years, your child is not all of a sudden not your dependent, cecause he is not physically present in the US for a year. As long as all the dependency tests are met you can still claim your child, assuming he remains a US citizen, resident or national.

The parents meet the citizenship and residency test at some point, so we look to the following rules to see if they apply to see if their children qualify.

Per pub 54. p.30
"Children usually are citizens or residents of the same country as their parents. If you were a U.S. citizen when your child was born, your child generally is a U.S. citizen. This is true even if the child's other parent is a nonresident alien, the child was born in a foreign country, and the child lives abroad with the other parent".


Art Dixon would need to review his circumstances to see if these rules would apply to him. Regarding when they were married, when the children were born, when they met these tests and so on.

If the dhildren are not eligible for SSN's they can apply for ITIN numbers which substitue for SSN, using Form W-7.

Art Dixon

Thanks for the answer. Here are the facts. I'm a U.S. citizen. My wife is a permanent green card holder. We got married in early 2008. Her children were Korean nationals, but we did support them 100%. They immigrated here in 2009. So I guess we can claim them for 2009 but not 2008?

AtlantaTaxExpert

Based on the facts provided, I agree with Mukata's post. You cannot claim your children as dependents because they do NOT meet the criteria for being a resident of the U.S.

The only foreign nationals who do NOT have to meet that crietria are residents of Mexico and Canada.

mack20007

This is a minor inconsistency but I think should be pointed out, just for clarification.

Mukata stated...

"they must be in the U.S. for some part of 2008".

That is not fully correct, as physical presence in the US is not required as pub 54.p.30 states in all instances ,

"...Children usually are citizens or residents of the same country as their parents. If you were a U.S. citizen WHEN your child was born, your child generally is a U.S. citizen. This is true even if the child's other parent is a NONRESIDIENT alien, the child was BORN in a foreign country, and the child LIVES abroad with the OTHER parent".

So, a person can be a dependent, but not be physically present in the US, they can qualify as a US citizens and not be physically present in the US, assuming the other dependency tests are met.

In Art Dixon's case, the conclusion Mukata
came to ultimately maybe correct, the rules stated in arriving at it are not in compliance with IRS dependenc provisions.

Again, this is a minor point.

In answer to Art Dixon, I would say that if he were not their father when born, i.e. they are not US citizens by parentage, and he did not adopt them to fall under those rules, then I don't see a basis from what he has stated for them to be claimed in 2008, but possibly 2009 if they became residents,e.g. under the physical presence test by being in 2009 more than 183 days, which they may appear to meet.

One thing I am not sure of in this reference, pub 54, p.30, it states "children are usually citizens or RESIDENTS of the same country as their parents". In 2008 his wife actually became a legal resident, and one could imply that her children therefore would become US residents under this rule. So, therefore become possible US residents in 2008. I am not familiar with this happening, and would need to verify this through further research, or contact with the IRS directly. My instincts tell me this cannot be done however.

AtlantaTaxExpert

Two years ago, for a 15-month period, I successfully applied for and received ITINS for client's children when the parents filed as full-year residents under the First-Year Choice procedure for married couples (as specified under IRS Pub 519).

My argument was simple: If the wife of the resident alien chose to be treated as a resident alien for the entire tax year, the "resident status" was also inferred to apply to the children as well. The IRS appeared to agree and issued ITINs to the children, even when it was apparent on the Form W-7 that the children were NEVER present in the United States for the tax year in question.

In the fall of 2007, the IRS stance on this issue apparent changed, when a number of ITIN requests for the spouses were approved, but the children's ITIN requests were denied.

In the rejection letters received from the IRS, they cited the requirement that the children have "some period of time of being physically located within the United States with their parents" in order to qualify for the ITINs. I have since modified my procedures to follow that requirement.

mack20007

Yeah, Atlanta, thats interesting, I'm not sure of the transfer of identity with residents either, even with a legal permanent resident. That maybe where they draw the line. I'd have to research it or have someone appeal it.

Citizenship transference is more straight forward, (due to parental birth) they need ... a Consular Report of Birth, Certificate of Citizenship, or Certificate of Naturalization." The
consular report of birth will confirm US citizenship to someone born abroad, and is an allowable
docuement to file with SSA to get a SSN, bypassing the ITIN. There are other ways to obtain citizenship also however.

AtlantaTaxExpert

Agreed; if the dependent is a U.S. citizen, then you can claim him/her as a dependent regardless of their physical location.