[cjarnol1]

I am a U.S. citizen filing jointly with my wife who is a non-resident alien. She is a student and her income comes from a government grant. Her income is taxed throughout the year. In past years she has been able to get those taxes refunded by specifying her wages on line 6 of 1040NR (Total wages and scholarships exempt by a treaty) and citing the treaty (China-USA tax treaty exempt articles 20b and 20c. See it here). (She also files form 8843 Statement for Exempt Individuals).

So my question is- This year, since we are filing jointly on form 1040, can she still specify the treaty and have her taxes refunded? If so, where would she specify the wages that should have been tax exempt? (1040 has no box for this). And, are there any other forms we need to fill out (8843, etc)?

Thank you very much for any help you can give.

[MukatA]

If you file joint return as residents, she will not get treaty benefit.

To get treaty benefit she files nonresident tax return and you file as married filing separately.
Choose which ever option is best for you.

[AtlantaTaxExpert]

Actually, due to an exception to the Savings Clause in the U.S.-China Tax Treaty, she CAN file jointly with you and STILL claim her $5,000 China Treaty exemption by entering it as a NEGATIVE $5,000 entry on Line #21 of Form 1040.

She WILL have to report the Form 1042-S income on Line #7 of the Form 1040, along with your wages.

If she files jointly with you, no Form 8843 is required.