pk
Level 15
Level 15

Deductions & credits

@sabya33 ,

 (a) to be able to claim Foreign Earned income exclusion, you need to meet the following:

         1. Foreign tax home ;

          2. Tax payer must be US person ( citizen/ GreenCard/ Resident for Tax purposes )

          2. Pass the  Physical Presence  test  ( 330 days abroad in any consecutive 12 month  test period  )  where  the current tax year or part thereof  must either  ends  or starts.

          3. The tax filing  cannot  be done till after the physical presence test has be satisfied..

The requirements are the same  for a taxpayer whom is approved to use the Bonafide Resident test  -- no 330  out of 365/366 days abroad test requirement.

 

Section 911 of Internal Revenue code  allows  exclusion only for qualified  individual   whom is defined as follows :

 

(1)Qualified individualThe term “qualified individual” means an individual whose tax home is in a foreign country and who is—

(A)
a citizen of the United States and establishes to the satisfaction of the Secretary that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, or
(B)
a citizen or resident of the United States and who, during any period of 12 consecutive months, is present in a foreign country or countries during at least 330 full days in such period.
 
My interpretation  of this is that  your  qualified  person  (citizen/resident status ) & foreign tax home status both must satisfied during the 12 month test period.  In your case  you are trying to exclude  the October- December of 2022   where in you could be a resident  ( may be  ) for those three months  but your 12 month test period would have to be  Sep/October through the next 12 months  ( when you are not a resident for most of the period.  This because your J-1 visa  is generally assumed to be terminated  either because of lapse of  residency in the USA  and/or non-employment by the original  sponsor for your visa.   I say this because J visa is always associated with employment / training by an institution.
 
Bottom line is  I do not believe you can sustain a challenge by the IRS  for exclusion of  your earnings  post your departure from the USA.
 
It is simpler to file 2022 as a dual status ( thus excluding your Indian earnings from US taxes )  but of course this means that you have to use itemized deduction and not standard  deduction.
 
The other issue here is that you will have a hard time  showing closer connection to the USA in order to prove that you were still a resident  ( banking, housing, significant assets  , family connections etc etc. )
 
Beyond this I don't know how to help you .
 
pk
 
 

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