Foreign Income question

cookiefan — Mon, 09 Mar 2026 09:53:17 GMT

Hi. My wife received a retirement wage from the foreign employer last year. She'd been in unpaid leave since 2016, and decided not to go back and finally left the position last year. This retirement wage was accumulated by withholding from her monthly wage and the same amount of employer's match during her active years. She was in the foreign country during her active duty years and stayed fully in the US during the leave. She paid income tax for this retirement wage to the foreign country and now about to file this income in the US.

My questions are:

1. Could it be considered as exclusion or is it not exclusion case since it was received while she was in the US?

2. By the regulation in that country, she has to visit foreign tax authority to get a proof stating the fund is legit and paid all taxes to request the foreign bank to transfer fund to the US bank. But it is not easy to make a visit especially during the pandemic last year. So if she receives the money in the US bank in the future, is it possible to report any expenses such as bank fee or currency conversion loss as expenses?

Re: Foreign Income question

LeonardS — Mon, 18 Apr 2022 21:22:38 GMT

No, your wife cannot claim the foreign earned income exclusion because she does not meet either the physical presence test or bonified resident test.

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Foreign Income question

Re: Foreign Income question