How do I separate mine and my spouses income? I have my own W-2 listed; however, spouse has inputted foreign income (no w-2). It's not picking up my spouse's income.

Forum|Forum|1 year ago
January 25, 2025
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This is for dependent child credit purposes, it says we're ineligible for the credit since both spouses need an income. Her income is inputted under "foreign income and exclusion" as her employer doesn't issue W-2 being a foreign company. For some reason, Turbotax is not picking up that we both have incomes.

NCPERSON1

@djtsukasa even if your wife's company is foreign and she is working in the US, they need to file a W-2. Is she working outside the US? The credit is only available if you lived in the US for at least 6 months of the year.

djtsukasaAuthor

Thanks for the reply!

We are in Japan, but on orders with the DoD. So we are "in the U.S" for all intents and purposes but her income is via Japanese employer, therefore no W-2.

NCPERSON1

@djtsukasa I do not see anything in the publication that provides for DoD employees assigned outside the US. If you are in the military and receiving non-taxable combat pay that can be added back in the determine the credit, but that is it.

Also, amounts excluded as foreign earned income (including any housing exclusion) on Form 2555, line 43 are not eligible for consideration for this credit. Is that where your spouse's income is listed? And if so, she would not be showing any "earned income" and therefore it would not appear there is eligibility for the credit.

Since your original question was how to separate your income from hers' on the tax return, that is actually quite simple but won't meet your objective. You could file MFS. But taxpayers who file MFS are not eligible for the credit. So it is a catch-22.

https://www.irs.gov/pub/irs-pdf/p503.pdf