863 and 865. The statutory rules cover interest, dividends, compensation for services,
rents and royalties, gains from sales of property and social security benefits
Need help on this.
When I got transferred from Singapore to US in 2018 June, as part of final settlement, I was taxed on all non vested RSU's left with me by Singapore govt. Those RSU's are getting vested from 2019 and I am taxed in US as well.
Q1: Can I claim the foreign tax credit for the tax I paid in Singapore 2018 as part of my 2019 filing this year?
Q2: If so, can I do it as a one time credit for the entire taxes i paid in Singapore for the portion of RSU's vested this year (I will have some vesting in next two years as well) or I need to claim only the tax relevant to the stocks vested and taxed so far in US?
Q3 : How do I apply for the tax credit in my filing (I am looking for the process, forms etc)
Generally, you can't claim foreign tax you paid in 2018 on your 2019 return. You would need to go back and Amend your 2018 Return to claim the Foreign Tax Credit for tax you paid in 2018.
However, since you paid tax in 2018 for RSUs vesting in 2019, you can claim the entire amount of the Foreign Tax you paid in 2018 by indicating 'accrued' on the Foreign Tax Entry screen, as long as the tax credit is not greater than the income realized in 2019.
Or, as you mentioned, claim the Foreign Tax Credit in 2019 only for stock vested in 2019, etc.
Type 'foreign tax credit' in the Search window, and 'Jump to foreign tax credit' to get to the entry area.
Click the link for detailed IRS info on the Foreign Tax Credit.
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Thanks for the response and options. I haven't added the foreign tax credit in 2018 returns due to two reasons(based on the tax consultant's input)
1. I have filed a dual status return as i was becoming a non resident to resident alien in 2018, since i moved on June 28th. This was useful to avoid paying tax in US for the global income for the full year.
2. The RSU's were not vested to my account in 2018.
So looks like i will have to go with the option 2 given by you to apply for tax credit for the vested RSU's in 2019?
Hi Karen, I am in the same situation and getting double taxed.
This is excellent and this is the answer i was looking for, In summary:
-> You are excluding the income for the which the foreign Govt has taxed for the RSU's from the W2 Declared income
-> You are also including the foreign taxes that was paid
Is this correct, Did you check this is what needs to be done?
Hi, I am in a similar situation -
A portion of my vested RSU have been withheld (and sold to pay outstanding taxes). The RSUs were granted to me while in India. So, a portion of taxes are towards Federal US and India (together 100%) with additional taxes towards State (California).
Since I will be filing as US resident, I am confused how India portion of the income (RSU income) and taxes to be included in Form 1040. (confused since 100% of RSU income has already been included in W2) @KarenJ @MarilynG1
Do I need to add India RSU income (which is a subset of W2 reported income) in 1040 ? and pay taxes additionally ?