When your spouse and children are U.S. citizens, claiming them on your taxes is simple: just provide their names and Social Security numbers. When they're non-citizens, though, things may be a little more complicated. But you can still claim them—and reap the tax benefits of doing so.
Why you claim them
For tax years prior to 2018, each person listed on your tax return—you, your spouse and any children or other dependents—you can subtract a certain amount from your taxable income. This amount is called an "dependent exemptions," and for the 2017 tax year, it's $4,050 per person. So if you were to list you, your spouse, and two children, your taxable income could be reduced by $16,200. This could significantly shrink your tax bill and, depending on your income, might even eliminate it altogether.
Beginning in 2018, dependent exemptions are no longer used in calculating your taxable income. However, other deductions and credits have been adjusted to lessen your tax burden after the elimination of dependent exemptions.
Resident and nonresident aliens
How you claim a non-citizen spouse to your tax return depends on your spouse's residency status. Your spouse will be either a "resident alien" or a "nonresident alien." Usually, there are two ways to tell whether a non-citizen qualifies as a resident alien:
- The non-citizen has a "green card," which is authorization from the federal government to live and work in the United States permanently. The IRS refers to this as the "green card test."
- The non-citizen was in the United States for at least 31 days of the year, and at least 183 days during the three-year period that includes the current year and the two years immediately before that. The IRS calls this the "substantial presence test." Learn more about how to properly count those 183 days with TurboTax's Tax Tips for Resident and Non-Resident Aliens.
Anyone who doesn't qualify as a resident alien is considered a nonresident alien.
Spouse's tax status
In general, resident aliens are taxed just like U.S. citizens. You would list a resident-alien spouse on your return and provide his or her Social Security number (SSN). If your spouse is not eligible for a Social Security number, he or she will need to apply for an Individual Taxpayer Identification Number (ITIN) from the IRS.
If your spouse is a nonresident alien, you can treat your spouse as a resident alien for tax purposes. If you choose this option, you can file a joint tax return with your spouse and have an increased standard deduction. You increase your standard deduction, but all your spouse's worldwide income will be taxed by the United States. If you do not choose this option you may be able to use the head of household filing status as long as you have paid more than half the cost of maintaining a household for certain dependents or relatives other than your nonresident alien spouse.
Consider spouse's worldwide income
Vincenzo Villamena, managing partner of a firm that provides tax planning help for Americans living overseas and others with special situations, says the easiest thing to do is to simply file a joint return, treating a nonresident spouse as a resident, if necessary. “But for long term tax planning, this might not be the most beneficial move,” he says.
That's because the money you would save by a dependent might be less than the additional tax you would have to pay because all of your spouse's worldwide income will be subject to U.S. tax. “Every case is different in this situation,” Villamena says, so it pays to run the numbers using different options and see what saves you the most money.
Non-citizen dependent children
You can claim a non-citizen child as a dependent on your tax return, which would likely entitle you to a dependent credit, if the child meets the IRS definition of a "qualifying child." This is the same standard that applies to children who are citizens. Your child is a qualifying child if all of the following apply:
- The child is your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, adopted child or a descendant of one of these, such as a grandchild. Adopted and biological children are treated the same
- On the last day of the year the child is either younger than 19; a full-time student younger than 24; or permanently and totally disabled
- The child lived with you for more than half the year
- You provided more than half of the child's financial support during the year
- The child did not file a joint tax return with his or her spouse, if married, except only to claim a refund of taxes withheld or estimated taxes paid
- The child must be a U.S. resident alien, U.S. national, or resident of Canada or Mexico
If your non-citizen child dependent does not have a Social Security number (SSN), you'll need to obtain an Individual Taxpayer Identification Number (ITIN) from the IRS for him or her.