Hi

I have been working in California for entire 2006. During October 2006 I changed my status from F1 (OPT) to H1B. I got married in December outside US and returned to US along with my wife (H4 visa) in 3rd week of December.

1. As per information on IRS web site and other sources (including ASK ME Helpdesk), it seems like my wife can opt to be considered as a RESIDENT for tax purposes and we can file a return as "Married filing jointly". Is this correct?

2. I will attach form W7 ( Application for ITIN ) along with notarized copies of my wife's passport to our Federal Tax return. But what should we do about state (CA) tax return? Should we file for an extension? Will FTB accept "waiting for ITIN" as a valid reason for extension?

3. What would be our filing status for CA. I read somewhere that I should use the same status (married filing jointly) which I used for my federal return. Is that correct?

Thanks in advance for reading / answering these questions,

taxpayer

1) Correct.

2) Wait until the ITIN is mailed back to your from the IRS. When you get the ITIN back, then (and only then) should you file the California tax return.

3) File Married Filing Jointly.

ATE, thanks for the quick answer.

I checked Franchise Tax Board website and as per information there, I don't even need to file for an extension. California automatically gives the extension. Since I am expecting a refund I basically have time until oct 2007 to file my 2006 CA tax return.

I don't agree about the answer for 2.
You shld not wait for ITIN number as long as you hv applied for it with you return.They automatically keep it updated as soon as they get the ITIN number.
& they mail it to you.Even you shld not file extension as well , as long as you applying before the due date.

The states do NOT coordinate with the IRS for ITINs. If you file a state return with the SSN area of a spouse or dependent blank, the return will be rejected in most states.

I called FTB and asked them if I should hold my CA return until my wife receives her ITIN. They told me that I have 2 options.

First option is to wait until my wife receives her ITIN and then file CA return. CA automatically gives extension until Oct 15th.

Second options is to file my CA return and write "Applied for ITIN" in space for spouse's SSN. CA will allocate her a temporary ID no and process our return. Once we get the ITIN, we should call up FTB and update the information.

Some states do allow for submission of the returns with the word APPLIED FOR in the SSN area. Apparently, California is one of them.

But it is a state-by-state case. Other states will reject the return if there is no ITIN or SSN.

taxpayer I agree with your second option

Glad to help!