FEIE vs foreign tax credit comparison — free calculator
Compares the earned income exclusion against the foreign tax credit on the same salary, so you can see which one carries the year.
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Compares the earned income exclusion against the foreign tax credit on the same salary, so you can see which one carries the year.
Enter your figures
An estimate for planning only. Rates and thresholds used here are the assumptions stated on this page; we confirm every figure against the issuing authority for your own tax year before anything is filed.
How the estimate is built
The exclusion removes earned income from the US base up to the annual cap; the credit offsets US tax with foreign tax paid on the same income, capped by the US tax on it. Where the foreign rate is higher than the US rate the credit usually does the whole job; where it is low or nil the exclusion is what saves the tax. Investment income is outside the exclusion entirely, so a filer with both needs the credit computed regardless.
Your next step
A calculator narrows the range; it does not settle a filing. If you already have an adviser, we will tell you what they should be asking rather than replacing them.
Reviewed for accuracy for the 2025 and 2026 filing seasons by Udit Gupta, Cross-Border Tax Expert, Legal Quotient Consultants. Written as general guidance, not as a recommendation for your situation. Talk it through with us before acting on it.
Foreign tax credit calculator — what this page covers
Readers arrive here searching for foreign tax credit calculator, and FEIE vs foreign tax credit comparison is what the page is about. Below: who it catches, what has to be filed, and what it costs — quoted in writing, before anything is done.
People also search for: foreign tax credit carryforward · feie vs foreign tax credit · form 5713 · foreign tax rate · what is the tax rate for income in us.
Why clients bring feie vs foreign tax credit comparison calculator to us
Both sides prepared together
Two returns built against each other by one team, so relief is claimed exactly once and nothing falls between the two systems.
The fee is fixed before we start
Quoted from your documents and agreed in writing. The number you accept is the number you pay.
The order of filing is planned, not improvised
Which return goes first decides whether relief can be claimed at all. That sequence is worked out before anything is submitted.
Every figure on a page is traceable
Where a rate or a threshold appears in our writing it names the tax year it belongs to. Where it could not be confirmed, the page describes the mechanism and quotes no number.
Cross-border situations we are engaged for
Choosing a route in a first full year abroad
A client on assignment wanted to know which route to take before the tax year ended, while there was still time to act. We took the projected salary, the foreign rate actually being withheld and their expected US position, then ran both routes on those figures rather than assuming the exclusion. The foreign rate was high enough that the credit carried almost all of it. The engagement produced a written comparison of the two routes, a note on the qualifying test their travel pattern supported, and a list of the records to keep before the year closed.
A salary in a low-tax country where the credit did nothing
An engineer moved to a country that charged little or no tax on employment income, and the previous return had relied on a credit that had almost nothing to offset. We recomputed the year on the exclusion route instead, established which qualifying test the facts supported, and checked the housing position separately. The engagement produced an amended return for the year still open, a documented qualifying position for the assignment period, and a written explanation of why the route that suited the previous posting did not suit this one.
Earnings above the cap where the tax had to be split
A client earned comfortably more than the annual exclusion cap and had claimed both the exclusion and a credit for the whole of the foreign tax paid. Foreign tax attributable to excluded income cannot relieve US tax that was never charged on it. We apportioned the foreign tax between the excluded and the taxable portions of the salary and recomputed the credit on the taxable part. The engagement produced a corrected computation, an amended return, and a working schedule the client uses each year as the cap changes.
A married couple who qualified on different tests
Both spouses worked abroad, but one had a settled home in the country while the other travelled constantly on a regional role. They had been treated identically on the return. We looked at each of them separately, because the cap is per qualifying person and so is the test. One qualified on residence, the other on days. The engagement produced separate qualifying analyses for each spouse, a travel record supporting the day-counted one, and returns for the open years prepared on the correct basis for each person rather than a single assumption for the household.
Investment income that fell outside the exclusion entirely
A client with a foreign salary and a portfolio abroad had filed on the basis that the exclusion dealt with the whole year. It never touched the dividends, the interest or the gains, and foreign tax on those had gone unrelieved. We separated earned income from investment income, applied the exclusion to the first and computed the credit on the second by category. The engagement produced amended returns for the open years, a recovered credit position on the investment income, and a return structure that keeps the two streams separate in future.
A mid-year move that split the qualifying period
A client left the United States partway through a year and the qualifying period straddled two tax years, which the previous preparer had handled by treating the whole first year as excluded. We established the date the foreign posting actually began from the employment contract, entry stamps and tenancy, worked out which test the facts supported and over what period, and apportioned the year accordingly. The engagement produced a dated chronology of the move, a corrected computation for each of the two years, and an amended return for the one still open.
Indian Rent Collected While Resident Somewhere Else
Rent from Indian property is taxed in India and again where you live, with relief on one side only. The file gets the Indian deduction right first, then claims the credit on the home return against what was actually paid.
Read how this one runsTwo Passports, Two Returns, One Income
Dual citizenship does not let you choose which country taxes you. The work is establishing residence, applying the treaty article that governs each income type, and preparing both returns from one set of figures so they agree line for line.
Read how this one runsAll case studies — every published engagement in one place.
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A partnership is taxed in the hands of its partners, so one engagement abroad can reach every partner's personal return. The order matters: the waiver is applied for before the invoice, the presence is tracked before it becomes an establishment, and the payroll is registered before the first day worked in the other country.
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