Foreign Income - Paid "Post-Move" in 2020; Earned ...
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
WJL2
Returning Member

Foreign Income - Paid "Post-Move" in 2020; Earned "Pre-Move" in 2019

Hi, 

 

I moved to the US in 2019. I filed taxes for the US and my previous country of residence for 2019. In 2020 I received payment for services rendered prior to my move to the US. To be sure, this was income earned in 2019 as self-employment income in a foreign country prior to my move to the US, but paid to me in 2020 when I was living in the US.

 

How should this income be treated on my 2020 US taxes?  (E.g., is this deemed foreign income or is this deemed U.S. self-employment income?)

3 Replies
ErnieS0
Employee Tax Expert

Foreign Income - Paid "Post-Move" in 2020; Earned "Pre-Move" in 2019

Are you filing as a resident or nonresident alien for 2020?

 

U.S. citizens and resident aliens are taxed on worldwide income. Almost all U.S. taxpayers are “cash basis”, meaning income is reported in the year received, rather than earned. That means if you are filing as a resident alien, you would include on your 2020 U.S. income tax return self-employment income earned in 2019.

 

If you are a nonresident alien, the income is probably exempt from U.S. taxation as it is not effectively connected with a U.S. trade or business.

Related Resource:

WJL2
Returning Member

Foreign Income - Paid "Post-Move" in 2020; Earned "Pre-Move" in 2019

Thank you very much. I am filing as a resident alien. 

 

To be sure, the relevant payments include Canadian sales taxes. How would these be treated under the U.S. return?

LinaJ2020
Employee Tax Expert

Foreign Income - Paid "Post-Move" in 2020; Earned "Pre-Move" in 2019

Please see my answer on your other post  #6128903 

 

To answer this, you will report the foreign sales tax income as Other Income. If you pay taxes to both foreign and US government on this income, you may claim a foreign tax credit.  See steps in the other post. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
v
Privacy Settings