Houston Tax Attorney
My wife was in US on a J-1 with 2 year home stay rule and has been in Vietnam since 2015. We elected to treat her as a U.S. resident for 2015 tax purposes – this is a rolling election so it will continue for our 2016 taxes.
According to IRS Publication 54 (https://www.irs.gov/publications/p54/ch01.html#…) we cannot claim that she is not a U.S. resident under any tax treaty:
“Nonresident Alien Spouse Treated as a Resident
This means that neither of you can claim under any tax treaty not to be a U.S. resident for a tax year for which the choice is in effect.”
However, (A) can we still claim a Foreign Earned Income Exclusion for her using the physical presence test? (B) If so, and she ends up with no taxable income for 2016, can I still contribute $5,500 to her 2016 Roth IRA as long as we meet all other criteria (joint income limits, my income being >$11,000 per year, etc.)?
It sounds like you made a 6013(g) election for your spouse. If so then she is a resident for tax purposes. Short answer is yes to (A). Not sure about (B) without additional facts.
-Law Office of Kunal Patel, LLC