[freephoneid]

Hello AtlantaTaxExpert.
Once again thanks for the reply!

But the pdf also says that "Do you have home in foreign country, etc?" Obviously, my parents are from India, so they r going to have their own house in India which essentially proves that they've closer connection to India.". Are you still saying that we need to say "No"? I'm little unclear...

Thanks!

[Five Rings]

You are confusing tax home with residence.

"Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes."

The closer connection test is this:
Even if you meet the substantial presence test, you can still be treated as a nonresident alien if you:

Are present in the United States for less than 183 days during the year
Maintain a tax home in a foreign country during the year (Refer to Chapter 28 of Publication 17 for a discussion of the tax home concept), and
Have a closer connection during the year to one foreign country in which you have a tax home than to the United States For determining whether you have a closer connection to a foreign country, your tax home must also be in existence for the entire current year, and must be located in the same foreign country for which you are claiming to have a closer connection

It appears from what has been written so far that your parents are retired from active business and live with you most of the year. They return to India occasionally where they maintain a dwelling to visit family and friends.

[freephoneid]

Hi FiveRings,
Once again thanks for the reply. And yes, my parents are retired & they came to US for the first time in US. All of their property is in India only. And they are planning to visit US again in next year... Hopefully, I'll be able to file their TIN & showing them dependent next to next year, since they'll pass SPT in next year... Correct me if I'm wrong... This thread has definitely answered all questions related to parents showing as dependent & will be helpful to everyone!!

Thanks!

[myusimmi]

Some good info here.

Can the experts define "current year" for tax purposes.

Here's an example:
Parent's here as below:
* 9 days in 2010 (They leave on 10th)
* 179 days in 2009
* 140 days in 2007
* 180 days in 2005

I have not yet applied for their ITIN but would like to do so if I can.

SPT rules - 31 days in "current" year and 183+ days in prior 3 years with the yearly fractional breakout of 1/3rd and 1/6th.

Clearly, they don't meet 31 days criteria in current year, that is, assuming current year = 2010 for tax purposes.

BUT, if current year = 2009 (as of 7th Jan 2010) for tax year, then the meet the 31 days plus the 183+ criteria easily.

So... how is "Current Year" defined.
1. Based on the current *tax* year?
2. Based on the a given day (when the question is asked and being responded to) in the current calender year
3. Based on the filled on date entered on the W7 form (though it will be submitted with the tax returns much later in 2010)

I hope it's #1 otherwise I will be cursing myself for the rest of the year for not applying for their ITIN in December 2009.

Thanks.

[AtlantaTaxExpert]

Based on their presence in the U.S. in 2009 and 2007, they HAVE the Substantial Presence Test.

Apply for their ITINs with your 2009 tax return, and claim them as dependents on the 2009 return. Note that they MUST sign the Form W-7.

[xina]

Hi,

I have been claiming my son as a dependent for the last couple of years. He was here in the US for about 2 yrs (obtained a ITIN #) and then went back to my country. I support him economically but he has not returned to the US since he left in 2002.

The person that does my taxes said it is fine for me to do this since I am still supporting him even though he is not in the US because he already met the requirements to obtain a ITIN while he was here.

[Five Rings]

An ITIN does not confer residency; it is merely an identification number. Your son must be a citizen or resident of the US to be your dependent; your advisor is in error.

Failing that test, I regret to say, you may not claim him as a dependent.

[xina]

Thanks for your answer.

Bu t I am more confused now. I read in previous questions that dependents that are nonticitzens and can't qualify to obtain a SS could apply for TIN for tax pruposes in order to be claimed as dependents. Why will my son need to be a resident or Citizen to be consider as dependent?

[Five Rings]

I'm sorry you are confused; the rules can be complex. Nevertheless, the rules for dependency are quite plain.

"You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico."

See for more detail:
http://www.irs.gov/pub/irs-pdf/p501.pdf

Xina, your tax "helper" is in error. Unless you wish to commit tax fraud, you may not take your nonresident son as a dependent.

[AtlantaTaxExpert]

Five Rings has it right. The child MUST be located within the confines of the U.S. for some period in 2009 (if he is NOT a U.S. citizen) to be claimed as a dependent.