My husband and I have been living in the United Kingdom since mid-June 2016. My husband is a UK citizen, and I am a US citizen. He has a US Travel Permit giving him permission to work abroad and retain his US Green Card, so long as he submits a US Tax return. He has had his Green Card for less than two years, so it is still a 'conditional' Green Card, and we are returning to the US to apply for the removal of these conditions in June 2017.
We are unsure as to whether or not he should be applying for a US tax-exemption for his UK earned income, which totaled around $22000 in 2016. On the one hand, he has paid UK tax on this income, and there is a UK-US tax treaty in effect. On the other hand, he does not seem to qualify as a foreign resident under the Bona Fide Resident Test or the Physical Present Test. Furthermore, given his Green Card situation, it is not clear if he should even be trying to qualify for US tax exemption under the terms of either of those tests.
We have been looking at the various options that TurboTax Deluxe mentions regarding our situation - and it mentions other options like applying for a tax deduction by other means, or paying US tax this year and amending our 2016 return next year.
Thank you for your time and advice
