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Posted

TP worked for US employer in Canada for 3 years. He left CA on 5/25/15 and transferred to his same employer in the US.

I completed the 2555 Foreign Earned Income Alloc Wks and reported all of his $108K Canada wages as foreign wages. Since his foreign wages exceed the $100,800 income exclusion limit, shouldn't the exclusion limit amount be excluded?

Part VII of F 2555 is prorating this amount by 145/365. The 145 days is from Jan 1 - May 25.

If all of his wages were earned within the 145 days, why is the program prorating the exclusion amount? I checked my entries and they appear correct. Did I miss something that caused the program to prorate the exclusion amount? Or is this how it should be done?

BTW I am using ProSeries.

Thanks.

Posted

it is also limited by the number of days in your qualifying period that are in the calendar year.  It doesn't matter that all of the income is earned during those days.  

For 365 days you get the max exclusion for 145 days your get 145/365 of the max.

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