You Make the Call - June 19, 2025

Question: Frankie is a U.S. citizen who lives and works in Greece. He meets the bona fide residence test and, under §911(d)(1), he elects to exclude his foreign earned income of $125,000 from U.S. taxation on Form 2555, Foreign Earned Income. Can he also claim the foreign tax credit on Form 1116, Foreign Tax Credit, for income taxes he paid to Greece?

Answer: No, he cannot double-dip on the same income. Because Frankie is using Form 2555 to exclude his foreign-earned income, he cannot use Form 1116 to claim the credit on the same income. Once Frankie elects to exclude his foreign-earned income, he cannot take a foreign tax credit for taxes on income he excluded or could have excluded. If he does, one or both choices may be considered revoked §911(a), Reg. § 1.911-7(b) (2).