Foreign Earned Income Exclusion

[Brenda McIsaac]

Does a full time college student that worked part time in Canada while attending University qualify as a bona fide resident? She was claimed as a dependant on her parents US return and she has dual citizenship between US and Canada. She earned just under $16K US dollars equivalent and was assessed $356 in provincial tax and then less credits for CPP overpayment and Climate Action Incentive had a balance due of $247 canadian dollars on her canadian prepared tax return. Any insight is greatly appreciated!

[Burke]

Your title suggests the student is filing a US return to claim FEIE? Then you say the parents claimed. What tax year are you referring to? Dependent exemptions were eliminated for 2018. And what is the age of the dependent? Also, "does...student...qualify as a bona fide resident" --- of which country? Lots of information missing.

[ATSMAN]

Burke makes a good point. Without knowing other details IMHO this girl will most likely not qualify for the Foreign income exclusion and on the 1040 the Canadian income has to be reported as Foreign earned income and then on Form 1116 a foreign tax credit may be claimed.

[Burke]

As an attendee at a foreign university, unless the institution participated in a US Dept of Education Aid program, the tuition would not qualify for AOTC. It does not appear there was any advantage for the parents to claim dependent unless it was possibly for state purposes, since child would not qualify for CTC either. Student would more than likely qualify as US resident since attendance at college is considered temporary absence at least for purposes of claiming dependency exemption in the US. However if she was a resident in Canada for more than 330 days, she might qualify for the FEIE if she filed a separate return in the US. It would probably not qualify if she lived in a dorm. Her tax home must have been in Canada. See Atsman's response above.

[TaxGuyBill]

since child would not qualify for CTC either

Why is that?

[Burke]

Because as a college student, she is not likely under age 17.

[ATSMAN]

Because as a college student, she is not likely under age 17.

But may qualify for the $600 other dependent credit, depending on the facts and circumstances.