Should I report my severance pay as foreign earned income if I was let go by my foreign employer?
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Should I report my severance pay as foreign earned income if I was let go by my foreign employer?

I was fired by my foreign employer in the end of 2018 and the severance pay was paid in the middle of January 2019. In this case, should I report my severance pay as part of my foreign earned income and for which year?

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Level 14

Should I report my severance pay as foreign earned income if I was let go by my foreign employer?

As long as you were in a foreign country when you performed the services that gave rise to the income, it is foreign earned income.   This would include severance pay.

The income is applied to the year in which you actually earned it, regardless of when you received it.

Therefore you would report the income on your 2018 return, and you would include the severance pay.

https://www.irs.gov/newsroom/foreign-earned-income-exclusion-2016


  

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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