My husband is a Canadian citizen and US permanent resident. I am US citizen. My husband accepted a permanent full-time faculty position in Canada last fall and we moved our family to BC on October 3rd, 2014. I am in process for permanent residency in Canada.
Can we claim the Foreign Income Exclusion on our Canadian income earned after moving here or do we have to file for a Foreign Tax Credit for the 2014 calendar year? We do not qualify as bonafide residents in 2014, and the 12 months for physical prescence test would be Oct 3rd 2014 through Oct 2nd 2015. We have no plans to leave Canada, but those 330 days haven't happened yet.
Is it worth filing for an extension and filing in October so we can claim the exclusion or should we just claim the foreign tax credit for the three months tax that we paid here in Canada?
Foreign Tax Credit or Foreign Income Exclusion?
Moderator: Mark T Serbinski CA CPA
It part-resident years the exclusion (it only applies to wages) usually works better than the credit. Try both ways (using software) and see.
If you can avoid using FEIE this year, you will have more options in future, so if it turns out you pay a couple of dollars more using FTC, stick with that. And That way you won't have to wait until October to file.
If you can avoid using FEIE this year, you will have more options in future, so if it turns out you pay a couple of dollars more using FTC, stick with that. And That way you won't have to wait until October to file.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best