Yes, if you did not pay tax on this income in Germany, then this would be excluded from the income that was taxed by your foreign country of residence. Here is more clarification:
Line 1a - Gross income from sources within (foreign) country - even if this income is not taxed in the foreign country. Don't include any earned income excluded on Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion.
Line 3d - Enter your gross foreign source income from the category you checked above Part I of this Form 1116. Include any foreign earned income you have excluded on Form 2555 or Form 2555-EZ but don't include any other exempt income.
Line 3e - Enter in each column your gross income from all sources and all categories, both U.S. and foreign. Include any foreign earned income you have excluded on Form 2555 or Form 2555-EZ but don't include any other exempt income.
Remember, this form is used to receive a credit for any foreign taxes paid. Therefore, you will report all worldwide income on your US tax return and use Form 1116 to report any taxes paid on your income to Germany. The tax credit you receive prevents double taxation.
Click this IRS link for more information as additional rules apply to nonresident aliens: https://www.irs.gov/pub/irs-pdf/i1116.pdf.
