Hi,
My wife is a foreign citizen. She lived in her home country and worked for a company there from 2018 to 2022. Then she moved to US at the end of 2022. Because that company supports remote work, she continued to work for the same company remotely after she moved to US. It's fully remote work and she lived in US for the whole 2023. She got salary from the foreign company and paid tax to the foreign government in 2023.
We're wondering if we shall report her salary as foreign income and the tax paid to foreign government as foreign tax credit. We intended to use form 1116 to record this, but we just found the requirement is that ---- the foreign earned income/credit could only be used when it sources to where service is performed. We're not sure what does "perform" mean here. Can we report foreign income/credit here?
What's more, if we can record them as foreign income and foreign tax credit, besides the income tax, she also paid social security tax to the foreign government including retire insurance/medical insurance/unemployment insurance, how shall we handle those? It should be part of gross income or part of credit?
We're really confused here. Thanks in advance for your help!
