A dual status alien refers to individuals who hold the status of a US resident alien and a nonresident alien in the same tax year. Dual status does not represent your citizenship but only your resident status for tax filing purposes in the US. Different rules apply in determining your US income tax liability for a dual status tax year.
Income from US Sources
Income received from sources within the US are taxable whether you are a nonresident alien or a resident alien, unless you are specifically exempt under a tax treaty provision. While determining which income is taxed in the US, you must consider exemptions under US tax law as well as exemptions provided by tax treaties.
Restriction for Dual Status Tax Returns
You are subject to certain restriction while filing a tax return for a dual status tax year.
- Standard deductions allowed on the Form 1040 will not be applicable for a dual status alien when filing tax returns on an ITIN.
- According to the general rules for qualification, a dual resident is entitled to exemptions for a spouse and dependents, as long as the spouse has his or her own ITIN, for the part of the year you were a resident alien.
- The total number of deductions for a spouse and dependents cannot be more than the total taxable income.
- Special rules on exemptions apply for the part of the tax year when a dual status taxpayer is a nonresident alien, if the taxpayer is a student from India or a resident of Canada, Mexico, and the Republic of Korea (South Korea).
- You will not be able to use the head of household tax table column or tax rate schedule.
- A dual status taxpayer cannot file a joint return.
- A nonresident alien who is married to a US citizen or resident alien cannot choose to file jointly with their spouse.
- A nonresident alien who is married to a US citizen is not eligible to take earned income credit, unless they are elderly or disabled.
A dual status taxpayer must comply with different rules for the part of the year they were a nonresident and a resident alien while filing tax returns.
A dual status alien holding an ITIN will file tax returns as a resident or non resident alien based on his or her status at the end of the tax year.
A resident alien must file Form 1040 for tax filling purposes. If the status was changed from a nonresident to a resident during the tax year or on the last day, dual status must be written across the top of the returns and a statement of the return must be attached to show the income for the part of the year as a nonresident. Form 1040NR for non residents, Form 1040NR-EZ for nonresident with no dependants.
ITIN Holder’s Last Filling Date for the Tax Year
An ITIN holder must file his or her tax returns no later than 15th of April, regardless of resident or nonresident alien status. If wages received during the tax year were not subject to withholding, returns must be filed no later than 15th of June.
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