Reporting interest earned on foreign bank accounts

[maverick]

I am a US citizen of Asian-Indian origin. I worked in India from 2006 to 2015, so I have a couple of bank accounts and a few fixed deposit accounts with those banks. The balances and the interest I earn in those accounts are in the local currency (INR) and not USD. I don't repatriate the interest earned back to my US accounts so I let them stay in the Indian bank accounts. The banks in India follow local tax rules and deduct tax "at source" which means that they deduct any applicable taxes on the interest earned before depositing the balance to the bank accounts. My question is: Does the interest earned on these accounts qualify as interest income for US tax reporting purposes? Since I don't repatriate them back to the US and also pay taxes for the interest in India, I thought that there is no need to duplicate the reporting in my US tax return. For the past 5-6 years, I've been reporting these amounts in my US tax returns but I'm now beginning to second-guess myself.

[DavidD66 · Accepted solution]

You can quit second guessing yourself if you have been reporting your foreign interest on your U.S. Tax Return.  A US Citizen or resident alien is required to report 100% of their worldwide income.  The fact that you left the interest in the foreign banks is not relevant.  You should also be taking a foreign tax credit for the tax you are paying on the interest (and any other foreign tax) to India.