I am currently married to a non-U.S. citizen. How can I submit our adjusted gross income? What type of documentation must I include?
Here is the full explanation about foreign income, from the Federal Student Aid Handbook:
In some countries the tax system does not operate as it does in the U.S., and people in those countries can earn a substantial amount of income and pay taxes without having to file a return. In such a case the person would correctly indicate that he did not file a tax return, and nothing will be reported for AGI or income tax paid. When that happens, he should report any net income that is earned from work in Question 38, 39, 86, or 87, as appropriate, of the FAFSA and not as untaxed income in Question 44h or 92h, which is where untaxed foreign income not earned from work should be reported. This ensures that the income
is properly included in the EFC calculation; for non-tax filers, income earned from work is used in place of the AGI and to determine eligibility for the simplified needs test (SNT) and automatic zero EFC.
As noted earlier, when income earned from work exceeds the U.S. tax filing threshold and the person indicates he is not going to file a return, the FAFSA will be rejected. The aid office must override the reject in FAA Access to CPS Online so that an EFC will be generated.
What happens when one spouse does file a return and the other does not file but has foreign earned income as described above? Because one spouse filed a return, the FAFSA should indicate in Question 33 or 80 what return was or will be filed, and the CPS will use the AGI for income and to determine eligibility for the SNT and auto-zero EFC. As above, the foreign income is still reported as income earned from work, but it is also added to the AGI of the tax filing spouse, as the guidance on page 15 instructs under “Married filing separately.”
In some instances employees of certain international organizations, such as the United Nations, the International Monetary Fund, the World Bank, and others, might not be required to file a return, which results in situations similar to those described above. Follow the same guidance—a non-tax filer will report income from that employment as income earned from work only, while a person who is married to a tax filer will report it as income earned from work and add it to the AGI of the tax-filing spouse.
Back in the last century, my not-yet-legal-resident spouse was allowed the option to file tax returns with me as though he were a legal resident. I don’t know if that option still exists. It may be worth digging into the bowels of the 1040 for information about that kind of thing.