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Subject:  Re: basic question on foreign income Date:  7/2/2014  8:59 AM
Author:  irasmilo Number:  121041 of 127611

I'm trying to determine if my daughter needs to file a Georgia state income tax return. I'm at the Georgia revenue site, have entered a question on the search query and no information comes up.

We have searched all around. She checked an ex-pat website and Georgia doesn't appear to be one of those states that requires a US citizen who works overseas to file an income tax return. She lives overseas ~11 months out of the year. In fact, it appears that she is considered a non-resident. Does that make sense or seem correct?

The GA Department of Revenue doesn't make finding the definition of residency easy. I had to go to the actual law code, O.C.G.A. 48-7-1 (emphasis added):

(10)(A) "Resident" means:

(i) Every individual who is a legal resident of this state on income tax day;

(ii) Every individual who, though not necessarily a legal resident of this state, nevertheless resides within this state on a more or less regular or permanent basis and not on the temporary or transitory basis of a visitor or sojourner and who so resides within this state on income tax day; and

(iii) Every individual who on income tax day has been residing within this state for 183 days or part-days or longer, in the aggregate, of the immediately preceding 365 day period.

(B) Every individual who, having become a resident of this state for income tax purposes under divisions (i) and (ii) of subparagraph (A) of this paragraph, is deemed to continue to be a resident of this state until the person shows to the satisfaction of the commissioner that he or she has become a legal resident or domiciliary of another state and that he or she does not come within division (iii) of subparagraph (A) of this paragraph. Upon such a showing with respect to any 12 month period immediately preceding income tax day, the person shall be taxable as a resident of this state only to the date of becoming a nonresident on an apportionment basis as prescribed in Code Section 48-7-85.

Based on the bolded section, I believe she continues to be a GA resident and must file a GA income tax return. I am not a GA resdident, nor am I fluent in GA tax regulation, so if the accuracy of my answer is important to you, I would advise seeking competent professional counsel.

Also, she has found out that she needs to file a 2555 form to report foreign income under $92,900 to the feds.

Is that all she has to do?

No. Form 2555 is used to exclude her qualifying foreign earned income from federal taxation. It is an attachment to her regular Form 1040. The rules allowing for the foreign earned income exclusion are complex, so she needs to read the Form instructions carefully before asuming that she qualifies.

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