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Posted by Alan on September 25, 2009, 4:28 pm
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jenny wrote:
> jenny had written this in response to
>
http://www.rockryno.com/taxes/California-adjustments-for-community-income-23041-.htm
> :
> Thanks for the input. My husband was a non resident alien up until
> November 2008
> when he arrived on greencard. According to pub 555 it says that if one
> spouse is
> a non resident alien, that you disregard community law and report income
> separately.
>
>>From what it says in pub 555, I would report...
> 100% of my income from Jan-Nov
> 1/2 my income from Nov-Dec
> 1/2 husband's income from Nov-Dec
>
> and my husband would report
> 1/2 my income from Nov-Dec
> 1/2 husband's income from Nov-Dec
>
> I believe california says that if one spouse is a resident, the other
> spouse
> (regardless of residency) is allocated 1/2 of the CA resident's income.
>
> So according to CA rules we would each report
> 1/2 my income for the entire year
> 1/2 husband's income from Nov-Dec
>
> Which rules do I follow?
>
> Thanks!
>
>
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You really need to discuss this with a tax pro familiar with
taxation of nonresident aliens, resident aliens, & dual status
aliens and community property. Here is why: If one of two
married people is a nonresident alien for part of the tax year,
they can not file a married joint federal return. You would file
as married separate and because he is a dual status alien who is
a resident alien at the end of the year, he would file the same
form as you as married separate and note that he is filing as a
dual status alien. He could exclude his foreign source income for
the period he was a nonresident alien. He just has to attach a
statement or a copy of Form 1040NR that identifies his foreign
source income that has been excluded on his normal US return.
There are special rules relating to how dual status aliens file
their tax returns. In lieu of that, you could both make the
election to treat him as a resident alien for the whole year. You
could then file a joint federal return. He would have to include
his worldwide income on that return. If he paid income tax on his
foreign source income to another country that is not on the US
blacklist, he could calculate a foreign tax credit to be applied
against his US tax.
Once he established residency in CA as a resident alien (his
residency start date is the first date present in the US as a
lawful permanent immigrant (green card holder) your income became
community (unless you have a pre or post-nuptial agreement that
states your income is separate) and you split that income on your
married separate tax returns.
Then you have to move on to filing in CA. That can also become
complex especially if he emigrated from a country that had
community property laws.
So.. as I believe you need to have a tax pro handle your federal
return, you might as well toss in the CA return as well.
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