Married to a Non-U.S. Spouse: How to File, and Whether to Treat Your Spouse as a U.S. Resident

Option 1: Married filing separately

The default. The U.S. spouse files alone, reporting only their own income. The nonresident spouse does not file unless they have U.S.-source income. The spouse's name is listed on the return, and an SSN or ITIN for the spouse is generally requested; the IRS instructions describe how to proceed if the spouse does not have and is not eligible for one. Married filing separately rates and brackets are less favorable, and certain credits are unavailable.

Option 2: Head of household

A U.S. citizen or resident married to a nonresident alien is considered unmarried for head of household purposes. If the U.S. spouse pays more than half the cost of maintaining a home for a qualifying person — typically a child — for more than half the year, head of household status may be available. It provides better rates and a larger standard deduction than married filing separately, and the nonresident spouse is not a qualifying person for this purpose.

Option 3: Joint return with a 6013(g) election

Section 6013(g) allows a U.S. citizen or resident and a nonresident spouse to elect to treat the nonresident spouse as a U.S. resident for the entire year and every following year until the election ends. The couple files jointly, gaining joint brackets and the joint standard deduction. The election is made by attaching a statement signed by both spouses to a joint return.

The cost of the election

• The nonresident spouse is taxed by the United States on worldwide income
• The spouse becomes subject to FBAR and Form 8938 reporting on their own foreign accounts and assets
• Ownership of a foreign company may require Form 5471 and bring in controlled foreign corporation rules
• Foreign mutual funds can become subject to the PFIC rules
• Both spouses are jointly and severally liable for the tax on the joint return

Foreign earned income exclusions and foreign tax credits are available to the electing spouse, so the additional U.S. tax may be modest where the spouse's income is earned abroad and taxed locally. The additional reporting, however, applies regardless of tax.

Ending the election

The election remains in effect until terminated by revocation, death, legal separation, or the IRS terminating it for inadequate records. If the election is revoked or ends, neither spouse can make it again with any spouse. That makes the initial decision more significant than it may appear.

Gifts between spouses

Transfers between U.S. citizen spouses are generally free of gift tax because of the unlimited marital deduction. Gifts from a U.S. person to a spouse who is not a U.S. citizen are not eligible for the unlimited deduction; instead, a higher annual exclusion applies, adjusted for inflation. Placing jointly owned property or large transfers in the non-citizen spouse's name can therefore have gift tax reporting consequences. The citizenship of the recipient spouse — not residency — controls this rule.

Choosing each year

The best filing status depends on the spouses' relative incomes, where the income is earned and taxed, the presence of children, the nonresident spouse's foreign assets and investments, and long-term plans such as moving to the United States. Running the numbers under each option, and considering the reporting consequences separately from tax, is usually the right approach.

Sources and official references

• IRS — Nonresident spouse
• IRS — Publication 519, U.S. Tax Guide for Aliens
• IRS — Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad
• IRS — Frequently asked questions on gift taxes