Reflecting partial year foreign income with a single W-2 for the entire year

[Stackfault]

I received severance for the entire year (Jan 1 - Dec 31) of 2019 which is reflected on a single W-2 from my former employer in the US.  I moved from the US to the UK Sept 2, 2019, expecting to live there 3 years so am now a tax resident of the UK.  I understand the severance received while I'm in the UK (Sep-Dec) is considered foreign earned income and is eligible for the Foreign Earned Income Exclusion once I pass the physical presence test.  (I'm filing form 2350 to get an extension to October 2020 so that I can file my return after ensuring I meet the test.)  How can I make TurboTax reflect the US and foreign income amounts accurately when they are from a single W-2 for the year?  It's currently treating the entire W-2 amount (and then some) as foreign income rather than just the income from Sep to Dec.  Thanks for your help.

[KarenJ2 · Accepted solution]

You need to first enter your W-2 in the W-2 section of TurboTax.  On the next screen you need to check the box that  you worked outside the US.

Go to the foreign earned income exclusion section

1. Check the box that you have a regular W-2 from your employer
2. Next screen will show you the amount of wages on your W-2
3. Confirm the wages you have already entered.- you need to make an adjustment to subtract the US wages in the Wage Adjustment field.  So your entire W-2 , enter the US source income, the balance will be your foreign earned income.  If you have any foreign housing expense in your wages or foreign taxes paid by your employer , this is considered 100% foreign income for sourcing purposes.