How should I claim income earned and taxes paid in a foreign country if I was a US resident for the entire year?

[ajwbug]

My husband was a US resident for all of 2017, but drew a salary from a foreign institution and paid income tax in the foreign country.

[IreneS · Accepted solution]

Since you're husband lived in the U.S., his income is not eligible for the foreign earned income exclusion.  However, if he paid foreign taxes, you you may be eligible for the Foreign Tax Credit or Deduction.

To enter foreign taxes paid, please follow these steps:

1. Click on Federal  > Deductions & Credits
2. Scroll down to the Estimates and Other Taxes Paid section and click on the box next to Foreign Taxes.  
3. On the Foreign Tax Credit screen, click on the Yes box.
4. On the Before We Begin screen, click on the Yes box.
5. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
6. Continue through the screens.  You will be asked to select the country where you earned the income.  [You can select various if you worked in more than one country.]
7. On the Other Gross Income - [country] screen do not re-enter your W-2 income.
8. On the Foreign Taxes Paid - [country] screen, enter the amount of foreign taxes you paid.  
9. You will be brought to the Country Summary.  Click Done.
10. You will eventually be brought back to the Foreign Tax Credit Summary.  If you need to report foreign tax paid on another category of income (e.g. investment) click on the Add a Foreign tax link.  Otherwise click Done.
    
    

 [Edited | 4/15/2020 | 8:40am PDT]