Foreign Income Exclusion for my spouse on TD visa

T

ThePresident777

New Member
Hello,
I work and live in US since 2015 and I am therefore considered resident alien. I got married in Sep.2019 and my wife joined me from Canada to US in Oct-2019. We are filing jointly as married which give her the possibility to be treated as resident alien (which we will elect). However, she had income in Canada before coming to US and she has to declare her worldwide income as resident alien. Initially, I wanted to declare her income alongside mine and then ask for a credit on foreign taxes (form 1116), however now I discovered she might be eligible for Foreign Earned Income Exclusion (form 2555).

I am still wondering if she is eligible for Foreign Earned Income Exclusion or should I simply file form 1116 and ask for credit on taxes? What wuld be easier and more advantageous?

Many thanks,
TP
 
Yes, I believe she is eligible for the Foreign Earned Income Exclusion. She would apply the Physical Presence Test to the 12-month period before she arrived in the US. As long as she was outside the US for at least 330 days in this 12-month period, she qualifies for the Foreign Earned Income Exclusion for that 12-month period.
 
Oh thank you so much for your help! I was reading both the Pub. 519 and Pub.54 as well as the instructions on the form 2555 and I was inclined to use the 12-month period before she arrived in the US, but wasn't 100% sure. This was very helpful, thank you. Hopefully, IRS will see it the same way when we submit the papers.
 
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