Hi,
I am a citizen of India.
I came to US on H1B Visa on July 29th 2012. My Wife and son came to US on 17th Dec 2012.

Effectively, we all are non-resident aliens.

1. From the information gathered till now, below are my options to file returns
File as a Non-Resident Alien (1040NR Form):
Most expensive option since there is no Standard Deductions and dependent exemptions are not covered.

2. Wait till May 7th and file as a Resident Alien
I can file as a Resident Alien after May 7, since I pass the substantial presence test on that date.
However, here I'll have to file for a return extension since it is beyond April 15th deadline.

3. file jointly as a Resident Alien
Most of my friends filed normal tax returns even if they were non-resident aliens.

Can you please confirm if I am correct and what would be the best option?

Option #3 is correct IF you file jointly and IF you wait until 7 May 2013 to file.

If you believe that you will need professional help filing this year, this IS what I do. Please double-click on my name (Atlanta Tax Expert) above to access my profile. You will find my email address in the signature portion of the profile (scroll down to the BOTTOM of the page).

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Originally Posted by AtlantaTaxExpert

Option #3 is correct IF you file jointly and IF you wait until 7 May 2013 to file.
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Thanks AtlantaTaxExpert. Before proceeding, would like to know if I understood you correctly.
You said I should Wait till May 7th, then file jointly as a resident. Is that correct?

Just to add here, 7th May 2013 is the date when I pass the substantial presence test for 2013. Hence I can file form 1040A as a resident alien.

However, my wife and child still don't pass the test since they came late. Will I still be able to file jointly and claim my child as a dependent?
(I heard IRS does not allow dependent who have not completed 180 days in the calendar year.In contrast, I also read publication 519 which states I can file jointly with non-resident alien if I am married at the end of year)

Your wife's location ia irrelevant; she could be on Mars for all the IRS cares, but your child must be in the U.S. for at one day in 2012 AND meet the Substantial Presence Test, so you will have to wait somewhat longer before you can file.

Because of the child, you must wait until 26 June 2013 to file.

Thanks AtlantaTaxExpert! In this case, am I eligible for Child Tax Credit?

My son was born in Feb 23, 2012.
I was with him in India for more than 6 months.
But he does not pass substantial presence test in 2012, he does it in 2013.

Yes, he IS eligible for the Child Tax Credit by waiting beyond 26 June 2013.

Thanks AtlantaTaxExpert.

However I am seeing that the 8812 form title says - "Filers Who Have Certain Child Dependent(s) with an ITIN (Individual Taxpayer Identification Number)".

Can't I if apply for Child tax credit if son's ITIN is not yet available? (I'll be filling W7 forms for wife & son along with the return)

You submit the Schedule 8812 as wel, and, when the ITIN is issued, you will get the Child Tax Credit.

Quote:

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Originally Posted by AtlantaTaxExpert

You submit the Schedule 8812 as wel, and, when the ITIN is issued, you will get the Child Tax Credit.

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Thanks AtlantaTaxExpert, but one thing I mentioned in my 1st post but missed in my latest post was that my son arrived to US on 17 Dec 2012, that's less than 31 days in 2012.

Below note in the "Instructions for Schedule 8812" mandates at least 31 day presence. Do you still have any workaround with which I can claim tax credit for 2012?

"If your dependent was present in the United States for at least 31 consecutive days in 2012 and meets the substantial presence test for 2013, see First-Year Choice under Dual Status Aliens in Pub. 519 to determine if your dependent may be considered to be a resident of the United States for part of 2012 under this rule. An individual may make an election for a child who is a dependent if the individual may make the election on his or her own behalf, the child qualies to make the election, and the child is not required to le a United States income tax return for the year for which the election is effective..."

Unfortunately, you are correct. If the child was not in the U.S. for 31 days, you cannot claim him. Sorry.