Foreign Income earned before moving to the US

[yzli]

Is this still true for the current filing period (filing for 2019 in 2020)? This answer makes logical sense but so far I haven't found any official IRS document that makes the same statement.

[pk]

@yzli , please could you start a  new thread  with your question -- this is an old thread with quite a few answers and situation, so it  would be unwise to follow this one  ( except for general information) -- a new thread with your  question and the situation you are in would be greatly appreciated

[Melia003]

Hi I am also Canadian. I worked in Canada Jan 1 to Feb 15 2019 . I earned an employer income and paid tax on that. I moved to NYC on February 16. Do I have to declare my income I had in canada from Jan 1 to Feb 16 prior to moving to the US? If so where do I add this income in my return in turbo tax? and how? Do i declare the amount deducted from the tax I paid from Canada and Quebec?

Thanks for your help

[pk]

@Melia003 , 1. the answer to your questions  depends very much on your own immigration status i.e.whether you are considered/treated as a Non-Resident Alien or as a Resident Alien for Tax purposes -- assuming of course that you are NOT a citizen of the USA.

2. May I request that you start a new thread -- this is very old thread

thank you 

[Melia003]

Good day

I am in a similar situation.  I am Canadian. I moved to the US on February 2019 on a TN visa. From Jan 1 2019 to Feb 15 I had a job and Income in canada before moving to the US.  Do I need to put that income into my us tax return. If so How do I do it on turbotax I don't seem to be able to put it and where do I put the tax I paid in canada on this income? If I dont have to put it where can I find a official note from the IRS to back this up?

Thank you for your help.

[SusanY1]

If you met the substantial presence test for the year and are filing your tax return as a resident alien on Form 1040 then do you do need to report all of your worldwide income on your tax return.  

The best way to enter this in TurboTax in your case is to enter it as "Miscellaneous Income" and "Other reportable income".

Follow these steps to do that:

1. Login to TurboTax.com or open your tax file in your TurboTax software installed on your computer.
2. Click on Wages & Income or Income & Expenses (depending on your version of the program.)
3. Click on Show more beside Less Common Income (if you do not see this option click on Show all Income.)
4. Click on Start (or Revisit) beside Miscellaneous Income, 1099-A, 1099-C.
5. Click on Start (or Revisit) beside Other reportable income. Enter the income here and a description that makes sense to you.

After you have entered the income you will need to enter the data for your foreign tax credit computation.

You will enter this in the foreign tax credit section of TurboTax.  To enter it, follow these steps.

First, enter the foreign income.  In the search box (magnifying glass) type the search term foreign earned income then click on the Jump to link in the search results and follow the prompts. When asked if you would like to try to exclude the income answer No.  

Then to enter the taxes paid follow these steps:

1. Click on Deductions & Credits (either in the center of the program or across the top)
2. Click on Show more beside Estimates and other Taxes Paid
3. Click on Start beside Foreign Taxes.
4. Follow the prompts.  Be sure to enter the same income amount here - here the income amount is just used in the credit computation but does not get entered as income on your actual tax return.
5. Note that your taxes paid on your foreign wages are General Category Income.

[Melia003]

I am a Alien on a TN visa. Resident for Tax purpose.

[Melia003]

Hi again,

Followed the instruction mentioned above. When I put in my income my reimbursement goes down from 2.6k to 918$ and when I add the 2226$ of tax paid on my Canadian revenue I still stay at 918$ of reimbursement. Why are the tax paid in Canada not changeing anything?

Thanks.

[pk]

@Melia003 , generally agreeing with @SusanY1  on how to file as a resident. However, note that any income prior to your entering the USA on work visa ( assuming that this is your first entry within the last there years ) are NOT included in your world income --- your  year begins  on the day you entered the USA.   So I do not understand the foreign income included prior to entering the USA.   Please elucidate.

[Melia003]

Good day. 

I am a bit confused. 

My 1st message was : 

 I am Canadian. I moved to the US on February  16 2019 on a TN visa. From Jan 1 2019 to Feb 15 I had a job and Income in canada (Quebec) before moving to the US.  Do I need to put that income (my job in canada) into my US tax return. If so How do I do it on turbotax I don't seem to be able to put it and where do I put the tax I paid in canada on this income? If I dont have to put it where can I find a official note from the IRS to back this up?

Reponse from susan was:

If you met the substantial presence test for the year and are filing your tax return as a resident alien on Form 1040 then do you do need to report all of your worldwide income on your tax return.   

I spent more that 183 days in the USA in 2019.

* I starting to work on a visa of February 18 2019 in NYC.

**I have visited the US as a tourist between Jan 1 to Feb 18 for vacations and interviews.

Do I need to put my income coming from my job in Canada from Jan 1 st to Feb 15 2019?

If I don't where can I find an official note of this on the IRS site?

Thank you very much. 

[Melia003]

Good day. 

I am a bit confused. 

My 1st message was : 

 I am Canadian. I moved to the US on February  16 2019 on a TN visa. From Jan 1 2019 to Feb 15 I had a job and Income in canada (Quebec) before moving to the US.  Do I need to put that income (my job in canada) into my US tax return. If so How do I do it on turbotax I don't seem to be able to put it and where do I put the tax I paid in canada on this income? If I dont have to put it where can I find a official note from the IRS to back this up?

Reponse from susan was:

If you met the substantial presence test for the year and are filing your tax return as a resident alien on Form 1040 then do you do need to report all of your worldwide income on your tax return.   

I spent more that 183 days in the USA in 2019.

* I starting to work on a visa of February 18 2019 in NYC.

**I have visited the US as a tourist between Jan 1 to Feb 18 for vacations and interviews.

Do I need to put my income coming from my job in Canada from Jan 1 st to Feb 15 2019?

If I don't where can I find an official note of this on the IRS site?

Thank you very much. 

[pk]

@Melia003 ,  I will hunt  and find you something  from the statutes or IRS rulings --will take a little bit of hunting around.  In the meantime , I leave with an example:

John, a citizen/resident of  UK, enters the USA on a  resident visa ( Green Card ) on October 1st. of 2019.  While in the  UK he was employed by a local entity and earned a salary which was taxed by the UK.  By US rules of residency, John is a resident of the USA  for the year 2019.  The  question becomes, when does the  year begin -- is it the Jan 1st 2019 or is it when he first entered the USA on October 1st 2019 ?  To me it would make no sense  and perhaps an over-reach to allow  USA to consider  the year for US purposes to have begun on 1st. of Jan because the for US purposes  the person did not exist.  Thus I maintain the year  begins on the  first day the person enters the USA  and is  either a Non-Resident or resident for tax purposes.  Therefore my conclusion that , absent any other contra-indications,  you do not need to include any earnings prior to entering the USA  in your world income for the  year.

But yes I will  find you some documentary evidence .

[Melia003]

Good day PK,

Were you able to find a source from the IRS. I would like to file my taxes ASAP.

thank you for your help I really appreciate it.

Regards

[pk]

@Melia003 , good evening.  First apologies for my slow response.  World income taxation is based on when one becomes a resident. Here is some thing from the IRS:  This is from IRS site page :  > 

https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates

"Residency Starting Date Under the Green Card Test

If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident (the date on which the United States Citizenship and Immigration Services (USCIS) officially approved your petition to become an immigrant).

If you receive your green card abroad, then the residency starting date is your first day of physical presence in the United States after you receive your green card.

If you were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be considered a U.S. resident at the beginning of the current year.

If you meet both the green card test and the substantial presence test in the same year, your residency starting date is the earlier of:

• The first day you are present in the United States during the year you pass the substantial presence test, or
• The first day you are present in the U.S. as a lawful permanent resident (green card holder)."

Thus I stand  by my contention that your world income declaration starts from the day you are physically present / admitted .

Does this give you enough reassurance?   or do you need the actual statute ( which may or may not cover the exact situation ?

pk

[Melia003]

Good day PK,

thank you for your reseach.

This apply also for Visa holder? Since i am not on a green card. 

Do I need to just do 1 declaration or do I need to do a non resident declaration for Jan 1 to feb 16 and a resident one from Feb 16 to dec .

Thank you again