Hello @pk
Thank you so much for responding to my post. Here are the details that you requested confirmation and additional input:
(a) you are both US person ( citizen ), resident of California.
Answer: That is correct. Both US Citizens residing in CA and still maintaining residence in CA and voter registration for both.
(b) You ( wife) have US sourced income for all of 2024; Husband has part-year US sourced income.
Answer: That is correct.
(c) Additionally Husband established Foreign Tax home ( exact date needed here -- it is usually the first full day post arriving in the foreign land
Answer: Landed in Germany on 30th August. First full day of engagement for PhD program is 2nd September 2024 (Monday) since 1st Sept was a Sunday.
(d) Husband has Foreign Earned Income ( this is not stipend right -- he has to actually work / research, teach or whatever ).
Answer: Yes, he has to conduct research (majority of time) leading to publishing papers and conference presentations, attend classes as a student about once a week.
Now the questions -- How to exclude FEI from US taxes ? And thereby reduce follow-on impacts on health insurance etc.
Answer: That is correct. He has already paid income taxes in Germany for the earned income in 2024. Additionally, for the statutory health insurance, the premium is deducted from his paycheck every month in Germany.
Is there anything I am missing ?
Answer: He may visit US for 3-5 weeks in total for family visit as well as for various conferences between now and end of 2025. However if we need to limit it to 35 days (365 - 330 days outside of US), he has an option to skip the family visits and conferences.
Very generally , in such situation it is best to request extension and file ONLY after meeting the Physical Presence Test window ( continuous 12 months, bridging the foreign earning period)
Answer: Yes, we have explored that option as well and massaged the dates in the Turbotax to reflect as if he left for Germany in 2023 Sept and had been there for 12 months till 2024 Sept. However, that doesn't reduce the MAGI for Covered CA premium assistance calculation and doesn't take into account the health insurance premium already paid in Germany.
Will you please confirm my understanding -- and I will be back .
