R-1 Visa holder

[shachar183]

Hi,

Can R-1 visa holder (nonimmigrant religious workers) claim a ACTC for a qualifying child that was born in the US (the child has a SSN)? I know he can't claim EIC since he files married filing separately (spouse doesn't have SSN under R-2 visa).

Asking for my rabbi,

Thanks,

[puravidapto]

The visa determines the residency status: resident or nonresident alien. If he passes the physical presence test and is a resident alien, then the visa does not matters. he can claim what is available just as any other resident. If his spouse does not have a SSN, she can apply for an ITIN and they can file jointly.

[itonewbie]

What @puravidapto explained is not exactly correct.

Your client will not, prima facie, be eligible for CTC in the first place because TCJA amended §24 to disallow, up to TY2025, the credit unless the qualifying child was issued an SSN as a US citizen, green card holder, or as a resident alien with employment authorization, pursuant to §24(h)(7).

The test that is used to determine the tax residency status of an individual under §7701 is substantial presence test (not to be confused with physical presence test as defined under §911 for purposes of foreign earned income exclusion).

As with many tax provisions, there are exceptions and visa type does make a difference - for example, certain individuals who hold certain types of visas such as F, J, and Q are exempted from counting certain US days of presence for purposes of substantial presence test.  Unless your client was previously an exempt individual, this would apparently not apply in your client's case.

[puravidapto]

The visa type makes a difference in determining whether they are a residents or not, for example, students with F-1 visa do not count their days in the first 5 calendar years, but once the individual passes the substantial presence test and is a resident, then her tax filing is the same as a US citizen.

In this particular case, the person with R-1 visa is not an exempt individual, and the child born in the US and has an SSN, so as long as the taxpayer passes the substantial presence test (most likely he does) and therefore is a resident, I do not see any difference between him and an American with a nonresident alien spouse.

[shachar183]

Thanks @puravidapto.

If you have raised this topic, I have another question (related to 519 Topic). Can a student (arrived on J-1) elect to be treated as a US resident?
I know he may qualify as a exempt individual and may not count days for 5 years under the substantial presence test and be considered as a nonresident for tax.

But what if he had only income generated in the US from a hospital where he does his internship (not a scholarship - real salary). He didn't break the Visa's rules but it is taxable income. Can he elect to be considered as a resident and benefit from standard deduction? He doesn't have any foreign income.

Under the same topic (519) 'First year Choice' an individual may elect to be a US resident for tax purposes when he was present for 31 days in a row. Is it also apply for students under J-1? Is this decision irreversible?

Thanks,

[shachar183]

The child was born in 2019 in the US and legally registered and received SSN. 
Can exempt individual (VISA J, F) may elect to be treated as a US resident?  

[puravidapto]

No, the logic flow is this: from the visa you determine the residency status, and if the taxpayer is a nonresident, then she cannot claim a dependent in general with one exception that "only nonresident aliens who are U.S. nationals, residents of Canada, Mexico and South Korea; or residents of India who were students or business apprentices can have a qualifying dependent".

Please do me a favor by voting for my idea. I cannot believe that only 4 people want Intuit to improve customer service.

[puravidapto · Accepted solution]

The answer is NO with the following two exceptions:

1. The nonresident is married to someone who is a resident at the end of year;
2. She ceased to be an exempt individual at the end of year, and satisfies the conditions for first year choice, in which case she will be dual status but still cannot be a full year resident.

Please also read my signature. Thanks.

[shachar183]

I'm a little bit confused.
If a J-1 student studies at a Med school in the US and works at that hospital (the income is taxable) and taxes are being withheld from his salary, he must file 1040NR regardless of the days he was presented in the US (assuming presented full year but within the first 5 years)?

I have never filed J-1 visa holders for my clients but I have been asked recently and truly didn't know the answer.
That helps!  

[puravidapto]

Yes, your understanding is correct. It will be helpful for you to read through the 10 examples: https://www.irs.gov/individuals/international-taxpayers/alien-residency-examples . I deal with a large number of nonresident cases each year, and correct many of them as well.