I moved overseas in September. I have Wisconsin sourced income until I moved out of the country where I now work for a non-US company. I have successfully claimed the Foreign Tax Credit on my federal return using Form 1116. When I fill out Wisconsin Part Year return, I can't find a way to factor in a foreign tax credit to offset the taxes I am paying in my foreign country on my earned income. It appears the Foreign Earned Income Exclusion will offset my state taxes next year, but I have not been overseas long enough to use it this year. Is there a way to have the Foreign Tax Credit flow to my state tax return? Thanks in advance.
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There isn't a way to get a credit for the foreign taxes paid on your Wisconsin return. They don't offer a tax credit for foreign taxes paid.
However, you are able to file as a part-year return for Wisconsin that will allocate out the income not earned in the state. You will do this by answering the questions in the Wisconsin-specific interview about dates that you resided in the state.
Thank you for replying. I filled out the interview questions but they seem to apply only to moves to another state to be able to allocate out income. I moved to another country, so I can't figure out whether my domicile remains Wisconsin even though I never plan to return, and maybe therefore I can't allocate out the income? Then I wonder if I file a part year 1NPR or a regular WI 1-form? I have left the state and do not plan to return in the future to live there. So it is very confusing and no search has given me a definitive answer. Thanks again.
No, if you have no intention of returning to WI, there is no reason to pay taxes there. A part year resident will file Form 1NPR - Nonresident and Part-year Resident Income Tax Return.
You want your tax forms to be correct and we have to work with a program designed for people moving around -usually- inside the US. Don't let the questions scare you. Go ahead and allocate your income between WI and not WI.
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