foreign tax refund & exclusion

[cat1239]

Student living full-time outside of the US... Small side jobs each year.  Reporting gross foreign income, which is completely excluded, and would be even if it were a higher amount.  Two questions:

1)  If a foreign tax refund is received, is it reportable?  No tax credits were taken, the gross was already reported and excluded.  Thus it would seem that a later tax refund would be reporting the same income twice, since it was already reported in the gross previously.  But want to check.

2) If the income is completely excluded (in essence = 0), I'm wondering why the overall tax is higher than if no foreign income was reported? I was under the impression that the excluded income would not be taxed.  But comparing the tax with/without the excluded foreign income, the "with" foreign excluded income does raise that amount of tax due.

Thank you!

[ErnieS0]

Foreign Tax refunds are not includible on your tax return, says Tax Expert @ThomasM125.

See Is foreign tax refund taxable in the US?

Your tax may be higher because although the foreign earned income exclusion excludes your income, that income is still used to figure the tax rate on your other income. Additionally, the exclusion may reduce some tax credits.

If you are paying more tax by using exclusion, you may want to tell TurboTax that you do not want to exclude your foreign income.

[Pebbles2]

Thanks, both answers make sense!