Foreign tax credit when filing a dual status return

[user17579721963]

I moved to the US in June last year. 
Can I file my return as dual status (resident June onwards and non-resident Jan to May) even if I am a non-resident in my home country (June onwards).

Basically does residency in the country I come from have any impact on whether I can file as a dual status return or not in the US ?

Also, while filing as a dual status alien, for the time I am a resident in the US, if I had income sourced in my home country which was taxed by the US as well, can I claim foreign tax credit on that to reduce my US tax liability ?

[pk]

@user17579721963 

(a) Assuming that you passed the Substantial Presence Test ( 183 days counting all days present in the current year, plus 1/3rd the days present in the  first previous year plus 1/6th the days present in the 2nd previous year), yes you are a resident for the tax year.

(b) You residency start day is generally the first day you are present in the year under consideration.

(c) You file as dual status person for the year -- in your case Jan1st. through Jun XX when your residency start day ( in this period you are taxed by the US ONLY on US sourced income and you file form 1040-NR, not supported by  TurboTax ); for the period  start of residency till the end of the year you file as a resident, taxed on world income and use form 1040.

(d) Since during the residency period you are taxed on world income, any foreign source income that are taxed by both the USA and the foreign source country, the foreign tax generally is eligible for Foreign Tax Credit.

Which country are you from and is the foreign source income from that country ?

Is there more I can do for you ?

[user17579721963]

Thanks for your response. I am from India and the foreign income is also sourced from there. Is this true even if I am non-resident in India for that duration ? Also isn't claiming foreign tax credit not restricted to only when filing as a resident in the US for the entire year, or can I claim it for the duration I am resident according to the dual status return filing. 

[pk]

@user17579721963 

(a)  "Also isn't claiming foreign tax credit not restricted to only when filing as a resident in the US for the entire year" ---- IRC section 901 (b) (3) and 901(b)(4) do not require  an entire year of residency.  FTC is available as long as the  Foreign Taxing country allows a similar credit treatment to US citizen/persons   whom are residents of that country  IRC 901(c).  In your particular case, US and India have a tax treaty in effect, your foreign source income is ONLY during residency period ( when US taxes you on world income).  See details of  IRC 901 here--->26 U.S. Code § 901 - Taxes of foreign countries and of possessions of United States | U.S. Code | US...

(b) While most of Indian taxation is based on residency, some like investment income, capital gain/alienation etc. are  taxable income for non-resident per US-India Tax treaty -- see here -->  India - Tax treaty documents | Internal Revenue Service.

(c) Since you met SPT during the  calendar year 2024 ( having arrived  in June XX ), your residency start date is generally the first full day of presence -- June XX.  See here -->  Residency starting and ending dates | Internal Revenue Service  

(d) Note also that because your residency does not cover an entire calendar year, you cannot use Standard Deduction -- must use itemized deduction.

Is there more I can do for you ? 

[user17579721963]

Thanks for your response @pk!