@bryto ,
(a) Your question : "could I get a credit to reduce the amount I owe for self-employment tax?"
Self-employment Tax -- SECA is not eligible for Foreign Tax Treatment. However if your tax home country has a Totalization agreement with the US Social Security Admin (SSA), then you can choose to pay either to the USA or its equivalent org . in that other country. Generally one would make a choice based on long-term plans. See here --> U.S. International SSA Agreements | International Programs | SSA
(b) your question : " Now, should I even claim the FTC for the passive income? It's my understanding that the FTC can only offset "earned income" and since this is 0$ for the US, I wouldn't get a tax credit anyway?
First : Foreign Tax Credit is ONLY available for Unexcluded income. Your active income i.e. Foreign Earned Income Exclusion, is eligible for FEIE as well as Foreign Tax Credit / Deduction based on your choice on how you want to treat the income or the tax thereon.
Second : Passive incomes are eligible ONLY for Foreign Tax Credit or Deduction under SALT ( State And Local Tax ) limitation.
Third: The safe harbor allows for foreign tax credit (for up to US$300 per filer of a return) against your federal tax ( i.e. reduces your tax burden and not below zero ).
Fourth: Form 1116 ( when safe harbor is not available ), limits the Foreign Tax Credit to lesser of actual taxes paid/accrued to a Foreign Taxing authority OR that imposed by US Fed on the same doubly taxed income.
Does this help ? Is there more I can do for you ?
