Hi Amy, Thanks for the response . Just to explain my situation better, details below
The employer grants the RSU at market rate, no tax at allocation since they are not vested.
Those RSUs vest 1/3rd every subsequent year. The employer taxes the entire vesting amount and includes that in the tax return, Feb of every year. Please note that every year will have RSUs vesting from last 3 years (1/3rd each year from last 3 years).
So in 2023 Feb – I got the below RSUs vested
Feb 2020 – 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
Feb 2021 – 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
Feb 2022 - 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
May 2022 I move to US and become a US tax resident.
Feb 2023 when the above 3 vest, US employer says that we see all of this above 3 years as Income and will include this in your W2, even if it means double taxation. Bunch of explanation around required by US Laws.
1. I have entered the Foreign Income ( RSU income) and the Foreign Taxes Paid ( Tax paid on India RSU) in Turbotax relevant sections ( Form 1116) . Calculations were provided by my India employer. Is this correct ? If I do not make the entry in Foreign Income, then I cannot claim foreign tax credit . Correct ?
2. However this led to double counting of RSU income ( Both in my W2 + Foreign Income). Can I make a negative entry somewhere in Other Income. Can you tell me where in Turbo Tax
3. Do I need to fill Form 8833. My foreign income is 4500 ( RSU income), 4500 ( Other Wages Received), 3000 ( Other Interest Income outside US). Since this totals more than 10,000 will I still get an exemption from 8833, since the double taxation amount is only 4500 ( less than 10,000)
