[HBazsi]

My friend and his spouse are Hungarian citizens. They spent 30 months in the USA from February 2009 to September 2011 as a J-1 research scholar and as a J-2 dependent. Their two children were born in the USA in 2009 and 2011, and both children have Social Security Numbers as they are both US citizens.

My friend went back to the US during the summer of 2012 for a summer research project (06/02/2012 - 09/03/2012, 93 days), still on his previous J-1 status. His family (spouse and two children) were with him in the USA for 83 days during this summer (spouse was on an ESTA authorization, not on a J-2 visa). Under the substantial presence test my friend is a resident alien for tax year 2012 (187 days), but his spouse is a nonresident alien (177 days).

They are still married, their children live with them. They are filing their taxes jointly. The question is whether they are eligible to claim the child tax credit for 2012.

Thanks for all the help in advance!

[AtlantaTaxExpert]

Even though he qualified for the Substantial Presence Test, he does NOT qualify to file a joint return if he filed as a non-resident in 2011.

He can file a dual-status return for 2012 and claim wife and children as dependents, but the Child Tax Credit is NOT available because he is ending the dual-status return as a non-resident.

Now, if they filed jointly as resident aliens or filed a dual-status return, THEN they can file a joint return and claim the Child Tax Credit, but they must also declare ALL world-wide income that they BOTH earned in 2012, and claim the Foreign Tax Credit for any Hungarian income taxes paid in 2012.

If they need professional tax help, they can email me at the email address in my profile.