Dear Sir,

I and my spouse are on L1-B visa.
Wr arrived to USA in Sept. 15th, 2009. We started work in USA in Oct 1st, 2009.

1. Are we Considered Non-Resident Aliens for 2009 ? What about 2010?

2. Are Social Security and Medicare taxes applicable for Non Resident Aliens (L1-visa) ?

3. We have child who was not issued a SSN when we initially came in.
Are dependants of L1-B not entitled for a SSN ? Do we then apply for a ITIN for our child ?

Thanks

You can file jointly with your wife and you both CHOOSE to be treated as resident aliens. This will allow you to claim the $11,400 joint standard deduction plus two $3,650 personal exemption (for yourself and your wife), plus get the $3,650 exemption for your child, plus get the $1,000 Child Tax Credit.

To apply for an ITIN, you need to complete Form W-7 for your child. You need to make a photocopy of her passport, then get the photocopy notarized. This can be done at your local bank in most states in the U.S.

The downside is that:
• You must wait until 1 June 2010 to meet the Substantial Presence Test before you can file for Tax Year 2009. We will file the extension (Form 4868) for you as part of our service at no additional charge.
• you must declare ALL 2009 world-wide income (wife's home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116) or to claim the Foreign Earned Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.