Hi,

I have entered US on H1b and I am trying to fill my W-4 form. I am married and my spouse is in India. She would be joining me in next 2 months. Can somebody please help with the options present in the Personal Allowances Worksheet.

A Enter 1 for yourself if no one else can claim you as a dependent (Should I enter 1 here ? Do my wife qualify as a dependent right now ?)

B Enter 1 if You are married, have only one job and your spouse does not work (Should I enter 1 here ? )

C Enter 1 for your spouse. You may choose to enter "0" if you are married and have either a working spouse or more than one job (Should I enter 1 here ?)

D Enter "1" if you have at least $1900 of child or dependent care expenses for which you plan to claim a credit (Should I enter 1 here ?)


Please help me with this. Thanks for your help.

When did you enter the US?

I entered US 10 days ago. This is my first entry on h1b.

So technically you would be a non-resident alien for 2011. As such you woould not be able to file a joint return or claim any dependents.
The instructions for filling out the W4 for non-resident aliens can be found here:

http://www.irs.gov/businesses/small/international/article/0, id=106274,00.html

Note that the W4 is for withholding purposes only and the exemptions don't have to be the same as on your actual tax return, but the withholdings should be such that your refund/amount owed should be as small as possible.

Since you are in the US for only a little more than a month in 2011, it would probably be easiest to file as non-resident alien.
However, you will have the opportunity to make 2 choices:
1. The first year choice: Once you are a resident alien in 2012, you can choose to be treated as a resident alien for the part of 2011 you were in the US. That would make you a dual status alien.
http://www.irs.gov/publications/p519/ch01.html
2. However, since you are married you could then choose to be treated as resident aliens for the entire year and file a joint return. That choice would be for both of you and both of you would have to report your worldwide income for the entire year.
http://www.irs.gov/publications/p519/ch01.html#en_US_publink1000222177




Special Instructions for Form W-4 For Nonresident Alien Employees

A nonresident alien subject to wage withholding must give the employer a completed Form W-4 to enable the employer to figure how much income tax to withhold. In completing the form, nonresident aliens should use the following instructions instead of the instructions on Form W-4.

For Forms W-4 completed after December 31, 2005:

1. Check only "Single" marital status on line 3 (regardless of actual marital status).
2. Claim only one withholding allowance on line 5, unless you are a resident of Canada, Mexico, South Korea, a U.S. national, or a student or business apprentice from India.
3. Do not claim “Exempt” withholding status on line 7.
4. Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4.

Added note:

in the case you decide to file as resident aliens and you file a joint return:
(The answers would only apply to resident aliens)

A Enter 1 for yourself if no one else can claim you as a dependent
You would enter 1 here (dependent doesn't refer to your dependents but to you being claimed as one)

B Enter 1 if You are married, have only one job and your spouse does not work
If you file jointly and your wife doesn't work, enter 1

C Enter 1 for your spouse. You may choose to enter "0" if you are married and have either a working spouse or more than one job
You would enter 1

D Enter "1" if you have at least $1900 of child or dependent care expenses for which you plan to claim a credit (Should I enter 1 here ?)
Do you have a child? Child care expenses? Than yes, enter 1


YOu could also use the IRS withholding calculator which uses more detailed information to determine the exemptions you should claim on your W4 (But again, only for resident aliens):

http://www.irs.gov/individuals/article/0, id=96196,00.html

If you decide to file as non-resident alien for 2011, use the instructions for nonresident aliens.
If you will be a resident alien in 2012, submit a new W4 to your employer in 2012.

Thanks a lot for your reply. I have something more to add.

Prior to h1b, I have entered US in April and I was here till August 31 on a business visa. Would it make any difference ? Can I be considered as resident alien for 2011 ?

Thank you once again.

If you were in the US 183 days in 2011, you area a resident alien, if less a non-resident alien
http://www.irs.gov/businesses/small/international/article/0, id=96352,00.html

If you pass the SPT (substantial presence test, but haven't been in he US on January 1st, you are a dual status alien but as stated earlier you could then elect to be treated as a resident alien for the entire year together with your wife and file a joint return.
In that case you could complete your W4 based on being a resident alien.

Thanks a lot for a comprehensive information. I have decided to fill my W-4 as a non-resident alien for 2011. For 2012, I will file my taxes jointly. I will send out the updated W-4 form to my employer in January 2012.

In this case, I am supposed to mark only A as "1". Rest of the BCD wouldn't apply. Am I correct ? Please let me know if I am missing something.