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California non-resident spouse but husband lived separate all of 2019.

singh
Level 4

My client, married to nonresident alien ( spouse has no ITIN nor Social Security number) wants to file his tax as Head of Household as they lived separate all of 2019. All four of their children lived with the client (father).

Their daughter lived with my client (father) and she qualifies to be father's dependent and she has 1098T from college.

I am not able to figure out which box I should check mark on Federal Information Work Sheet PART X 

"American Opportunity and Lifetime Learning Credit ………….( From 8863 )'

"YES or NO   For 2019, was the taxpayer (or spouse if married) a nonresident alien for any part of the                            year, and did not elect to be treated as a resident alien?"

If I check mark "YES" then AOTC is denied. 

Under what circumstance should I check mark "NO" ?

My client's spouse has been living in CA for last 17 years but is not a resident of USA.

She had ITIN two years ago but she never renewed it. 

In 2018 they filed Married Joint return and IRS disallowed EIC, CTC, and AOTC.

Thank you in advance for any input.

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BobKamman
Level 13

However, if he qualifies to file as Head of Household (separated for the last six months of the year, with children living in his home), then her status doesn't matter.  You might have a problem, though, with the disallowance from last year:

(4)Restrictions on taxpayers who improperly claimed American Opportunity Tax Credit in prior years

(A)Taxpayers making prior fraudulent or reckless claims
(i)In general

No American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period.

(ii)Disallowance period
For purposes of subparagraph (A), the disallowance period is—
(I) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to fraud, and
(II) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud).

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BobKamman
Level 13

How did you determine that she is a nonresident alien?

Substantial Presence Test

 

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2019. To meet this test, you must be physically present in the United States on at least:

  1. 31 days during 2019, and

  2. 183 days during the 3-year period that includes 2019, 2018, and 2017, counting:

    1. All the days you were present in 2019, and

    2. 1/3 of the days you were present in 2018, and

    3. 1/6 of the days you were present in 2017.

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BobKamman
Level 13

However, if he qualifies to file as Head of Household (separated for the last six months of the year, with children living in his home), then her status doesn't matter.  You might have a problem, though, with the disallowance from last year:

(4)Restrictions on taxpayers who improperly claimed American Opportunity Tax Credit in prior years

(A)Taxpayers making prior fraudulent or reckless claims
(i)In general

No American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period.

(ii)Disallowance period
For purposes of subparagraph (A), the disallowance period is—
(I) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to fraud, and
(II) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud).

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singh
Level 4

 Thank you, BobKamman, for the detailed explanation. Just to let you know that in the previous year IRS disallowed CTC, EIC, and education credit saying that the spouse did not have a valid ID.

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