A new green card holder, who received their green card in Oct, 2011, qualified for foreign income exclusion because of physical presence test. When filing 2011 Income Tax return, since this person had only held the green card for two months (Nov and Dec), can only 2 out 12 months be applied to foreign income exclusion? In other words, can foreign income exclusion be applied proportionately, or must it be for a full year? Are there any other ways to apply foreign income exclusion?
State/Country relating to question: Massachusetts
Hi and welcome to Just Answer!
For the person to qualify for the foreign earned income exclusion - he/she should: -- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or -- Meet either the Bona Fide test.
If your income is only wages from foreign sources and less than $92,900 (in 2011) - you will not have any Tax Liability.
If the person became a resident for tax purposes starting Oct, 2011 - 330 days test may be met during 12 month period between Oct, 2011 and Oct, 2012.
If yes - the maximum foreign earned income exclusion for 2011 will be prorated according to number of days the Taxpayer was in a foreign country.
Let me know if you need any help.
Taxes, Immigration, Labor Relations