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US Tax Filing on H1B for H4 Spouse, Dependent Children FAQs

In the last article, we have covered the tax classification of resident vs non-resident alien, filing status info. In this article, we will cover how H1B visa holder would file taxes for H4 spouse and dependent children, including benefits and other FAQs.

What are the various tax benefits that a H1B visa holder claim?
In general, U.S. resident aliens can use the same filing statuses and can claim the same deductions allowed to U.S. citizens for the entire tax year.

  • Exemptions: U.S. resident can claim personal exemptions and exemptions for dependents according to the dependency rules for U.S. citizens. Non-residents can only claim personal exemption or an exemption for spouse in case of married filing separately (when spouse has no gross income and is not filing taxes.)
  • Deductions: U.S. resident aliens can claim the same itemized deductions as U.S. citizens, using Schedule-A of Form 1040. These deductions include certain medical and dental expenses, state and local income taxes, real estate taxes, interest you paid on a home mortgage, charitable contributions, casualty and theft losses, and miscellaneous deductions. If you do not itemize your deductions, you can claim the standard deduction for your particular filing status. Non-resident aliens and dual-status aliens are not allowed to claim the standard deduction and must itemize in order to claim tax deductions.
  • Tax Credits: The following items are some of the credits residents may be able to claim: child and dependent care credit, credit for the elderly and disabled, child tax credit, education credits, foreign tax credit, earned income credit, and adoption credit.

Refer: Chapter 5 of https://www.irs.gov/pub/irs-pdf/p519.pdf for details.

Does an H1B visa holder get any tax benefit if his spouse and children are living in U.S. totally dependent on him?
As a family you will be able to save more taxes than being a single and claiming dependent indeed gives better tax benefits. In general, for tax purposes wife is regarded as spouse (whether on H4), not as dependent.

  • Exemption: As you are already entitled to a personal exemption, which reduces your taxable income ($4,000 for 2015) and you get extra exemption for your spouse and each child you care for. Example: If husband and wife are filing jointly and have two dependent kids, they can claim in total of 4 exemptions. For tax year of 2015, in their case, total exemption was 4 x $4,000=$16,000.
  • Deductions: It depends on you filing status. If you are married and your spouse is living on H4 with you, you can file as married filing jointly and can get better standard deduction ($12,600 in 2015) as compared to filing single ($6,300 in 2015).
  • Tax brackets: Tax brackets are different for each filing status, so your income may no longer be taxed at the same rate as when you were single. See below for example:
Tax rateTaxable income for Single filersTaxable income for Married filing jointly or qualifying widow(er)Taxable income for Married filing separatelyTaxable income for Head of household
10%Up to $9,225Up to $18,450Up to $9,225Up to $13,150
15%$9,226 – $37,450$18,451 – $74,900$9,226 – $37,450$13,151 – $50,200

 

  • Child Tax Credit: For each qualifying child (that you claim on your tax return), you can receive up to $1,000 child tax credit. This credit delivers a dollar-for dollar reduction in your tax bill.

Refer: https://www.irs.gov/uac/ten-facts-about-the-child-tax-credit or https://www.irs.gov/pub/irs-pdf/p972.pdf to learn if your child qualifies for child tax credit.

What are other tax benefits that can be claimed for dependent child as Internationals ?

  • Additional Child Tax Credit: Its simply the refundable portion of the you Child Tax Credit. It usually works if you have lower tax liability than your actual child tax credit. Example: If your tax liability for the year is only $750 and you qualify for the $1,000 Child Tax Credit. The Child Tax Credit will reduce your tax bill to $0 and, if you qualify, the remaining $250, you will receive as the Additional Child Tax Credit
  • Child and Dependent Care Credit: This Credit can reduce your tax bill if you paid for your dependent’s care to someone so that you could work or look for work. You may be able to deduct up to $3,000 for one dependent, or up to $6,000 for more than one dependent with the Child and Dependent Care Tax Credit. If your status is married filing jointly, you can only avail this credit if both spouses are either working, looking for work or attending a full time college.

Refer: https://www.irs.gov/pub/irs-pdf/p503.pdf to learn more or checking your eligibility

  • Adoption Tax Credit: If you adopted a child, you may qualify for the Adoption Tax Credit apart from all other exemptions and credits relating to child.

Can I claim for my wife if she is not living with me in U.S. or has not visited U.S.?
Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. However, if at the end of your tax year, one spouse is a U.S. citizen or a resident alien and the other is a nonresident alien, you can choose to treat the nonresident as a U.S. resident. You can file jointly with your wife to get maximum tax benefit. Here, each spouse must report his or her entire worldwide income on the joint income tax return. If you need to file a return, your spouse must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).  If your spouse is not eligible to get an SSN, he or she can file Form W-7 with the IRS to apply for an ITIN. Refer to How to file ITIN for dependents for more information.  You must also provide original or certified copies of documents to verify your spouse’s age, identity, and citizenship.

Refer: https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse-treated-as-a-resident.

Can I claim for my child if he/she is not living with me in U.S. or has not visited U.S.?
No, you can only claim if your child qualifies, check this for eligibility: https://www.irs.gov/pub/irs-pdf/p972.pdf

Where can I get passports of my dependent certified for ITIN, if living outside U.S.?
You can get passport certified from issuing agency or U.S. embassy/ consulate offices located in your country. Refer How to file ITIN for dependents 

I am a resident alien who recently got married, can I still file under Married category?
You may file only if you got married before 31st of Dec of the tax year.

How long does it take for the refund to come in after filing taxes?
According to IRS e-filed tax returns with direct deposit will be processed within 21 days of IRS e-file acceptance. For mailed paper returns – Refund processing time is 6 to 8 weeks from the date the IRS receives your tax return.

Any other thoughts to add on filing taxes for dependents in US ?

image credit : https://pixabay.com/en/family-dollar-money-hedged-forward-960451/

   

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55 Comments

  1. Hello Kumar,

    I’m on H1 and my son (H4, ITIN) has been outside US for 7 months in 2020. (March to Sep)
    He was in US for the whole year in 2018 & 2019.

    Will I be able to claim $500 child tax credit? Or should I not be claiming because he hasn’t been in US for more than 183 days in 2020?

    Reply
  2. Hi there. I am on H1B visa and got married in 2020. My wife now has the H4 visa. We’re filing as married, filing jointly, and applying for her ITIN via paper file. I understand that she can be considered as a US resident for tax purposes. As such, is she eligible for foreign earned income exclusion for 2020 filing? I’ve read through the IRS website, and this is still unclear to me.

    Reply
    • Hi,

      Have you checked these guidelines? https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion.
      And this test https://www.irs.gov/help/ita/can-i-exclude-income-earned-in-a-foreign-country. This test is valid for full year residents, not dual status residents.

      Reply
  3. Hello,
    Thank you for really informative article.

    Starting working on H1B: 03 AUG 2020
    Spouse and Children came in US on H4: 28 Nov 2020

    Can I claim my children as depended? Please guide, thank you.

    Reply
    • Hi Mudasar,

      I don’t think you can claim your children as they don’t meet residency test. Check qualifying test details here : https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules#Tests%20for%20a%20Qualifying%20Child.

      Pub 519 page 27 clearly states they have to meet 5 test to be considered as qualifying children.

      I would recommend to check with your IRS agent at the time of filing taxes and ITIN.

      Reply
  4. Hello,

    I’ve read the comments section to get the gist of what I was looking for, but I have a few more questions.

    1. Can my mother (who is on H1-B) claim me as a dependent for tax purposes when I’m studying in the U.S on an F-1 student visa? My age is below 24, I’m a full-time college student and I was on H-4 visa for the first year of college and then changed to F-1 visa. I have been in the U.S. for 3 years now (on and off).
    2. Will claiming me as a dependent for taxes have any impact on me getting an in-state tuition rate at my university? (I live in Texas)

    Thank you! 🙂

    Reply
  5. Hi.

    My wife is on H1B visa, and I am on H4. I am trying to apply for ITIN, we arrived in the US June 2020. What shall we do? It says that I need an income tax return but I have no idea what to do. Please enlighten me.

    Reply
    • Hi,

      You need to apply for ITIN at the time of tax filing in 2021. That’s when you need your tax return. Nothing needs to be done at this stage.

      Reply
  6. sinbha,
    There are two things, if he was working from US and paid on H4, then it can be bigger issue as you cannot be working without proper EAD. Did he had H4 EAD to work ?

    Reply
  7. Hi,
    I am on h1b I got married and my spouse came to US in 2018 mid so filed Married Filing jointly and applied spouse’s itin as well as part of that tax filing. Spouse stayed in US only for 20 days in the whole 2019 but I have spouse’s ITIN details. So should I go for married filing jointly or married filing separately this time.

    Reply
    • In that case you have to declare your wife income as well, as such she does not meet residency but better check with a tax person.

      Reply
      • Hi Ruchika, thank you very much for responding. Spouse doesn’t work even in India. So my major concern is which option to choose married filing jointly or Married Filing seperately. I assume in order for me to get best benefits of Married Filing jointly the spouse has to meet residency criteria but here as that’s not the case both married filing separately and married filing jointly would almost gave same return amount if I am not wrong , correct?

        Reply
  8. My husband is on H1b visa and we got married on 8th December 2019, however i came to US in January 2020. Am I still eligible for joint tax returns for the financial year 2019?

    Reply
      • My husband is on H1B since 3 years now, since he has to do his returns for the previous financial year where I wasn’t residing in the country and i am on my H4 dependent visa will we be still eligible to file a joint itr?

        Reply
  9. I am on H1B – my wife & kids are in India and never been to US. for tax filing 2018/2019- whether i need to select as Single or married separately or Head of household.. Please suggest…

    Reply
  10. My spouse travelled back to india in May 2019 and employed there. Can i file my tax return as married filing jointly in US. She was with me 2018 and 2017 so she qualified substantial presence test.

    Reply
  11. Hi,

    I’m on H1B and my spouse is doing Masters from here. I’m the sponsor so wanted to know am I eligible to avail tax benefits against the college fees?

    Looking forward to hearing from you.

    Thanks,
    Kumar

    Reply
  12. Hey Kumar,
    I have similar query. I came in Jan 2020 and planning to bring my wife on H4 (non-working) in Oct-Nov’2020.
    In which category should I fill w4, married filling separately or married filling jointly?

    Reply
  13. Hi,

    I got married to my spouse on Dec 30th 2019. She has been working and is still working in Kuwait. She plans to move here mid of 2020.
    Since I changed to H1B status on Oct 1st 2019, I know I qualify as a Non-resident. I read that I cannot file jointly if both of us are non-resident aliens.
    Since I’m planning to file as Married, I’m not sure how to file a separate tax return for her with her foreign income (She doesn’t have SSN/ITIN). Has anybody else had a similar experience.

    Reply
  14. Your blog is awesome and informative. I have two questions.

    1. I came in the US Dec 2018 on H1B visa. I have been here for almost a year now. Do qualify as a non-resident alien or a resident alien? I read the same question above, but just to make sure.

    2. My wife is with me on H4 visa and she is not working. Can I claim her as my dependent?

    Thanks a lot.

    Reply
  15. Hi !

    What if the husband is on H1B and spouse is on STUDENT visa F1 sponsored by the husband ? Can he still claim the exemption benefits ?

    Reply
    • Hi, I am H1b holder living in US from July 2018. I am married and spouse is in India and not planning to bring them here before December 31st. Please advice me which category I can select, single or married?

      Reply
      • Urgent help needed.
        Hi Kumar. I got my h1 b approval just now. My current cpt period is going to expire on 15 and my employer has to rehire me on h1 b. Do I need to feel new w 4? Is there any other form that I have to fill out?/

        Reply
  16. Hi Team,

    This is really an excellent article to understand about dependent taxes. Can you also please confirm on one last question. I’m on H1 & my wife is on H4. We are sending our twin-kids to day care (Pre-School). Since my wife is not working, can I claim the kids’s daycare expense as exemption while filing Tax.

    Reply
    • Hi Kumar,

      You can only claim day care and dependent care expense, when you both work, or she is looking for work.

      refer below link :
      https://www.irs.gov/credits-deductions/individuals/child-and-dependent-care-information

      Swetha

      Reply
  17. If H1b’s spouse(holding H4) has rental income in India, does she need to file ITR in India? or that rental income will be taxable?

    Reply
  18. Hi Ruchika,

    I have got married in December 2016 . I cam back to US along with my wife in January 2017.
    Can i file my tax returns as Married Filing Jointly for 2016 after i obtain an ITIN for my Wife ?

    Reply
    • Hi Ashish,

      To be qualified as a dependent, child must be a citizen, national or resident of US. For this determine if your dependent meets the substantial presence test (atleast 31 days during 2016, and a total of 183 days during the 3-year period counting all the days present in 2016, plus 1/3 days present in 2015, and 1/6 of the days present in 2014)

      Even if your child does not meet this substantial presence test for 2016, your child may still be treated as a resident of the United States for 2016 in certain circumstances. This is ‘first-year election’ when your child was present in the United States for at least 31 consecutive days in 2016 and meets the substantial presence test for 2017. You can get details from below link and pub 519 for aliens (https://www.irs.gov/pub/irs-pdf/p519.pdf).

      Refer https://www.irs.gov/pub/irs-pdf/i1040s8.pdf or https://www.irs.gov/instructions/i1040s8/ch01.html for details

      Reply
  19. Excellent article. May folks doesnt know that they can consider non resident spouse can be considered as tax resident and losing lot of money. Good article to read. I have personally alerted and got the best benefits for such folks so far.

    Reply
  20. Any person residance in us on H1b visa he need to declare property, income created in india in us inxometax return ? Indian property or income are taxable in us where he is paid taxes in india as indian income tax act?

    Reply
    • Hi Vipul,
      A person is filing as US resident has to declare any income created in India. For taxes already paid in India, you can claim credit. Basically there won’t be double taxation.

      Reply

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