CA resident,spouse in Canada but choose to be treated as US resident

Oct 11, 2010 2 Replies

My situation:



I am full-year US (in California) resident. Spouse works in Canada. She chose to be treated as US resident and we file married filling jointly for federal return (Failing jointly reduces tax due to her foreign tax credit and lower rate compared to my filling separately). My income 100k (all from California), and hers 70 k (all from Canada).



Questions for California return:


  1. She chose to be US resident. Is she a California resident or non-resident?


  1. How her Canada source-income is taxed in California?

  2. What is our total income taxable in California: a) only my 100 k? b) Me: 1/2 of 100k + 1/2 of 70k Spouse: 1/2 of 100k (California source) Total: 135k c) all of our income: 170 k. (problem is California does not allow foreign tax credit, right?)


4) Can I file married filling separately in CA since spouse has no Cali income?


------------------------------------- Joe


.

2 - Her Canadian source income is taxed in California to the same as income earned in another US state, if she is considered resident/ domiciled. 3 - If she is considered resident/domiciled of California, all your income is considered taxable in California

NOTE: You are likely considered resident for tax purposes in Canada as your spouse is located there. I suggest you review this page:

formatting link

She lives in Canada for the whole year. She elects to be treated as US resident. What I am not sure is his residency in California.

After she choose to be US resident, can she be non-resident of California? in 540 NR, can she declare that she is non-resident of California?

------------------------------------- Joe

.

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required