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taxnewbie5
New Member

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Thanks, for calculating the % of foreign income, do I need to get the percentage on the total W2 income(ie foreign vested rsu + us income) or just the foreign vested RSU income
KarenJ
Intuit Alumni

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

No you would calculate foreign workdays on all your RSU income.  If 240 workdays during the year and 120 of the workdays were foreign you would calculate 120/240 * RSU income = foreign income from RSU.  If you were working overseas in 2017, then your base salary can be allocated by workdays as well (but only on 2017workdays) Bonus would usually be allocated using prior year workdays if some of it was earned overseas.
TomYoung
Level 13

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

@TurboTaxKarenJ

Do you have a cite for that percentage allocation treatment?  I'd like to read it.

Thanks.
KarenJ
Intuit Alumni

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Hi Tom... closing shop for the day.. will look for it.
KarenJ
Intuit Alumni

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Sourcing rules are contained largely in IRC 861-
863 and 865. The statutory rules cover interest, dividends, compensation for services,
rents and royalties, gains from sales of property and social security benefits
liviu
New Member

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Edit: I found the answer later in the thread. Thanks

maheshr3
Level 1

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Hi There,

 

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)

 

Thanks

Mahesh

MarilynG1
Expert Alumni

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

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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maheshr3
Level 1

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Hi Marlyn,

 

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?

 

Mahesh

balrajvishnu
Level 1

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

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?

 

Thx,
Vishnu

bsingh101
New Member

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

Is excluding the RSU income (which is paid to other country) by adding -ve value in misc income is correct way. Has anyone did this?

ISG1984
Returning Member

I've paid foreign taxes on RSU income already includes in my W2. How do i claim a foreign tax credit for this.

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 ?

 

Any help here would be appreciated. @KarenR  @TurboTaxKarenJ

@DavidD66 

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