Foreign Allowance

Forum|Forum|3 years ago
September 1, 2022
3 replies
15 views

Hi, I’m just starting a Trainee program with an European Union agency. The stipend they give me is considered an ‘allowance’ in the European country I live in and therefore isn’t taxable. Do I still have to report it on my US taxes?

Not A Product Question

Anonymous_

Level 15

Probably (you are taxed on your worldwide income, generally). I will page @pk12_2, who is very good at this.

pk_

Level 15

@casiegel , as I understand from Euro Commission site , the stipend is really to defray the cost of living in the country. Thus for a US citizen/ Green Card holder, this income would be looked upon as a stipend paid to you and is income that is taxable. However, because you are having a foreign tax home ( if you are staying abroad for more than 330 days total in a continuous 12 month test period, then this income would be eligible for foreign earned income exclusion. From Euro-Union site it appears the session starts in October and so you will have to be abroad till atleast Oct of 2023 to be able to file a 12 month test period to establish foreign tax home.

Does this help ? If you need more , then please provide your immigration status ( US citizen/ Green Card or ? ), how long is your trainee period expected to be , which country ( Belgium or ? ) etc.

casiegelAuthor

Level 2

Ok, thank you! I have already been abroad for a few years, so I've been taking the FEI exclusion on all my self-employed income since I've been here. This is my first time having an actual contract and I wasn't sure if it should be included on my taxes or excluded all together given the way my country of residence views it. But I will put it and take the exclusion for it. Thanks!!