Hi,

I need help in understanding if I need to go the route of 2555 or should I report the indian income in 10 40 and get tax credit through 1116. Here is the brief summary of my status:

I work for an indian software company and on L1 visa here on deputation for one of their clients. My tenure at US

2002 - 2003 - the whole year
2003 - 2004 - the whole year
2004 - 2005 - the whole year ( filed my 2005 returns as resident alien)

2006 Jan 31 - Went back to India
2006 Feb - 2006 Aug - Indian salary as I was physically present in india.
2006 Sep - 2006 Dec - again in US on L1 (with my wife who works for the same company and a son)

I believe I have to file as Resident alien ( substantial presence test) meaning I have to report all sources of income including the income earned in Indian (between Feb and Aug). But I also noticed that you can get foreign income exempt by filing 2555 ( if the income is less that 80 k). Will I be able to do that with Resident alien status (nationality indian) ? Please advise.

Thanks

You do NOT qualify for Form 2555.

File Form 1116 instead.