canadian income to u.s. taxpayer

[JimTaxes]

maybe i should pass this one but giving this a shot.. facts

• taxpayer moved to canada in august 2018 but not canadian citizen until mid 2019
• taxpayer has one u.s. w-2 for 2018
• taxpayer also has some canadian proof of income for her new job for late 2018 work
• taxpayer told me they are having someone do their canadian return and can i do her u.s. return
• i do not think she qualifies for 2555 exclusion. does anyone know the steps to do this u..s. return as far as the canadian income goes. rule is worldwide income,, right? but not sure how the  move or the 2555 fits in. thank you.

[EricF]

For the following discussion, I assume that the taxpayer remains a U.S. citizen while she is a Canadian citizen.

To be able to take the foreign earned exclusion on Form 2555, the taxpayer must meet either a (1) bona fide resident test, or (2) physical presence test.

Under the bona fide resident test, the US taxpayer must be a bona fide resident of Canada for a full calendar year.  She can apply first in 2019, and if she does, her bona fide residency period can extend back into 2018.  If you need a full 2019 to qualify, you can request special extensions to file the return by January 31, 2020.

Under the physical presence test, the US taxpayer must be outside the US for 330 days out of a 365-day period.  If she is in Canada not returning at all to the US, you can probably find such a period beginning in July 2018.  You would need to extend her return until after the qualifying 365-day period ends in 2019.

If the taxpayer doesn't meet the qualifications for income exclusions, she can claim tax credits on her US return for Canadian taxes paid.

[JimTaxes]

ahhh. that's it.. i knew something but had a fog.. the tax credit for 2018 it sounds like.. thank you.

[mircpa]

Regular 1040 for taxpayer with US w2 & Canadian income to be included & foreign tax credit for Canadian part of income taxes paid from income in Canada. Have them file Canada tax return first to figure out foreign tax credit.