I came to US on 3 rd Aug 2009 along with my wife and kid. I visited US 2008 in business Visa and stayed for 56 days. In 2009 visited in business visa for 11 days. Do I need to file for 1040 or 1040NR? Do I qualify for exemptions for myself and spouse?

Thanks

Krish:

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 a $3,650 exemption and $1,000 Child Tax Credit for your child.

To apply for an ITIN, you need to complete Form W-7 for your wife and child. You need to make a photocopy of their passports, 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 mid-May 2010 to meet the Substantial Presence Test before you can file for Tax Year 2009.
• 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.