Form 2555 or dual status tax return?

[nfbarros]

Hi,

I was a J-1 visiting scholar for a few years in the US, having left the US to an European country by the end of April 2019. After the initial 2 years in the US, as I fulfilled the Significant Presence Test (SPT), I was filling my taxes as a resident alien (form 1040). I didn't have any other income besides the one I was receiving from the US institution. Life was (relatively) simple tax wise.

Now for 2019 things seem awfully complicated. Since I left the US by the end of April I still pass the SPT (approx. 100 days). However, I did not return to the country after that moment I started another job in another country right after (May 1st). 

From reading around, it seems I could file taxes either as a dual-status alien (sounds complicated and documentation is a bit sparse), or just as a resident alien filing also form 2555. From the documentation, I can define a 1 year period over which I was not in the US for at least 330 days  (May 1st 2019 to March 1st 2020), and so I could get foreign tax exclusion. 

Is there any advice on what would be the best case? I can find quite a lot of articles about foreign nationals arriving to the US, but very little about the taxes for the ones that leave. I find it suspicious that both options are available to me, and suspect I am misunderstanding something. 

As a matter of fact, I already signed up for Turbotax to submit the taxes, and then found out that it is not possible to submit dual-status tax returns through it. However, form 2555 seems to be possible.  

Any advice on this situation would be greatly appreciated. 

Thank you.

[KarenJ2]

The foreign earned income exclusion is only for US citizens or green card holder.  You cannot use the exclusion on your tax return.

Please see Publication 519, page 8 for information on the last year of residency.  Your residency termination date is December 31, 2019 unless you can show a closer connection to a foreign country.  If you use this, you must file a dual status return, part year resident and part year nonresident.

If you file a full year resident return, you can use foreign tax credit to help offset any double taxation.

[nfbarros]

Thank you for the clarification. From the instructions it was not clear that form 2555 only applied to citizens and green card holder (I suppose the issue stems from "resident alien" having different meanings for visa and tax purposes). 

If I understand correctly, instead of filling form 2555, one option is to choose to file a full year tax return and then fill in form 1116 to offset the taxes I have paid in the foreign country from my foreign income, is that correct? Unlike the dual status return, I can do this on Turbotax, right?

Thank you so much for your help.

[KarenJ2]

Yes, you can use TurboTax to file your 2019 resident full year return.  Much easier than the dual status.

You will need to report your worldwide income on your US resident return.

Glad to help!