Solved: Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?
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centennial95
New Member

Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?

 
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bine22
Level 7

Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?

yes, you can claim the foreign paid tax credit for taxes paid on income not excluded with the FEIE.

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3 Replies
bine22
Level 7

Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?

yes, you can claim the foreign paid tax credit for taxes paid on income not excluded with the FEIE.

View solution in original post

pk
Level 12
Level 12

Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?

generally NO, but why would you want to do that?  normally what expats do is to wait till they qualify for the Foreign Earned Income exclusion ( Physical presence test ) and then file for portion of the year that fell in the  12 month test period and claim as much of the  FEI exclusion  as allowable. A similar track is followed when the foreign assignment is complete and the tax payer has repatriated.  What are you trying to do?

centennial95
New Member

Can I claim 2months of foreign income exclusion (physical presence test that starts at the end of October) and then claim a foreign tax credit for the months prior (those that the physical presence test does not cover)?

I moved in August. However, I returned to the US in October and then again in July for vacation. Thus, I cannot claim any time between August and October, as I would not get 330 days out of country. I start qualifying for physical presence test at the end of October, so basically can only exclude roughly 2 months of my foreign income (November and December). However, I also had foreign income August through October and was trying to see if I could get a credit for foreign taxes paid on that portion of the income. My understanding is that you cannot claim both the exclusion and the credit on the same income, which makes sense, but I'm not trying to claim the exclusion for the first few months as I don't qualify, I believe.
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