[sp8]

Hello,

I am a H1B holder in US from Jun 2006.
My Wife and kids never been to US. What would be my filing status and can I claim Spouse Exemption.

Thanks
- SP

[AtlantaTaxExpert]

SP:

You can file jointly with your wife; her physical location is irrelevant.

You MAY claim your children as dependents, but they will NOT qualify for the Child Tax Credit.

[vengab0yz]

There are 5 criterions that must ALL be met to file jointly and claim exemptions for dependents. One of the criteria is:

- must be a U.S. citizen or national, or a resident of the U.S. Canada, or Mexico.

How could a person claim the exemptions for wife and kids if the above criteria is not met ?

[AtlantaTaxExpert]

I have thoroughly researched this, and have spoken to the IRS on the child's dependency issue in such cases on THREE separate occasions over the past two months.

The wife's physical location when filing jointly is completely irrelevant. When they file jointly and make this choice, they choose to be treated as resident aliens. When this choice is made, residency status is granted to the wife NO MATTER WHERE she is located.

If a child is involved, the residency status is ALSO APPLIED TO the child under this program. Again, this issue was not directly addressed anywhere in IRS Pub 519, so I queried the IRS International Tax Hotline at length. They even conferred with the IRS legal department and called me back to confirm the interpretation, which is that the child receives the residency status of the parents when they make this choice EVEN IF THEY HAVE NOT BEEN IN THE UNITED STATES IN 2006. The only requirement is that they be in the custody of at least one of the parents for the entire calendar year.

BOTTOM LINE: Making the First Year Choice and Choosing to be treated as a resident alien grants residency status to the spouse AND the child, making both eligible to be treated as dependents.