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Level 3
posted Aug 22, 2021 11:33:17 AM

How would you report foreign wages earned without the exclusion

 

 If you choose not to claim foreign income exclusions, how would you report foreign wages earned without the exclusion, and also be able to claim the EIC and Child Tax Credit?

 

Reference: 

https://ttlc.intuit.com/community/taxes/discussion/re-foreign-income-and-child-tax-credit/01/2345018#M838079

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1 Best answer
Level 8
Aug 26, 2021 11:45:49 AM

Foreign income AND the foreign earned income exclusion (FEIE) are both in the same section of TurboTax. It’s confusing.

 

To report foreign income but not claim FEIE, do what @Critter-3 advises in the last entry of the link you mentioned:

  1. Enter your foreign income.
  2. Keep going until TurboTax asks whether you qualify for the FEIC.
  3. Say NO (even if you qualify for FEIE) if you DO NOT want to claim FEIE).

You can find the foreign income section under Personal > Personal Income > Less Common Income > Foreign Earned Income and Exclusion or type foreign income in Search then select Jump to foreign income.

 

TurboTax will remove Form 2555 but keep your foreign income.

5 Replies
Level 8
Aug 26, 2021 11:45:49 AM

Foreign income AND the foreign earned income exclusion (FEIE) are both in the same section of TurboTax. It’s confusing.

 

To report foreign income but not claim FEIE, do what @Critter-3 advises in the last entry of the link you mentioned:

  1. Enter your foreign income.
  2. Keep going until TurboTax asks whether you qualify for the FEIC.
  3. Say NO (even if you qualify for FEIE) if you DO NOT want to claim FEIE).

You can find the foreign income section under Personal > Personal Income > Less Common Income > Foreign Earned Income and Exclusion or type foreign income in Search then select Jump to foreign income.

 

TurboTax will remove Form 2555 but keep your foreign income.

Level 3
Aug 29, 2021 5:55:36 PM

Thank you so much for clearification.

Level 3
Sep 17, 2021 6:55:26 PM

HI,

This helped, thanks. I have one question though.

We are able to successfully follow the step wizard, while we were unable to claim Earn Income Credit. 
As per turbo tax  EIC can't be claim if you have Foreign Earn income, ( we have only income via foreign salary), while turbo tax allowing child credit.

Is that correct or I we are doing something wrong ???  (no EIC)

 

Background:

1. US citizen leave abroad for full year.

2. Marriage filling jointly

3. Only income is foreign Earned income (salary) $15000 approx.  (under 24k limit)

4. Two kids.

 

 

 

EITC Qualification Assistant. tool on IRS website, showing eligible of EIC. 
Some article showing not eligible if not live in USA more then half year. 

Level 8
Sep 19, 2021 8:55:37 AM

Hi syedHarisali,

 

Check the IRS EITC assistant again. When I ran your situation, it shows you do not qualify for the Earned Income Tax Credit because your children did not live in the US for more than six months.

 

To be eligible for EITC, your child must live in the same home as you in the United States for more than half of the tax year. The United States includes the 50 states, the District of Columbia and U.S. military bases. It does not include United States possessions such as Guam, the Virgin Islands or Puerto Rico.

Qualifying Child Rules

Level 3
Sep 19, 2021 11:26:45 AM

Perfect, you are the man, you are always to the point & accurate.

My mistake, I missed (fill incorrectly) that part and was thinking why TurboTax not matching with IRS.  Read detail under "? "mark after you point out.

 

Lot of Thanks.