Foreign Earned Income CreditI

[M_J]

I have a client who works for the UNITED NATIONS and for the past 20 years has qualified for the full Foreign earned income credit.

HOWEVER when covid hit in March 2020 he got stranded in NY for 72 work days and earned 33947 during that time period before returning to Senegal.

I always qualified him for the bona fide residence test and got the full CREDIT.

How do I now reduce the credit by the percentage of days he worked in NY.  I know I must subject the $ 33947 to Self Employment tax as well as NYS tax .

I filed his 2020 erroneously and claimed the full FEIC and now am trying to amend so that the 72 days he was here reduces the FEIC.

Can someone advise?

Thanks,

Mark

[sjrcpa]

If he is a bona fide resident he does not have to meet the 330 out of 365 days physical presence test.

[BobKamman]

It's been a while since I did one of these.  But I think even for bona fide residents, earnings while in the US are not eligible for the exclusions.  I would do another complete 1040 return, mark it "amended" at the top and attach a cover sheet explaining the changes.  Sometimes the 1040-X isn't the best way, especially when there is no refund involved.  

[sjrcpa]

@BobKamman Yes that is correct. I didn't read closely enough the first time.

@M_J   Amend the return. On the 2555 only the foreign earned income is excludable, not the amount earned in the US. In Screen 31 Foreign Wages there is input to distinguish foreign wages and wages earned in the US. FYI-This is an exclusion from taxable income, not a tax credit.

In Screen 45 you can Adjust [A] nonfarm SE income for the wages subject to SE tax.

[George4Tacks]

I found this discussion (search sucks on this site)

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/united-nation-does-not-...

[M_J]

Thanks All

very helpful and I’ve now figured it out!