[maximus99]

Hi,
I'm a US citizen, Georgia resident, who recently migrated to Australia. I receive a US military retiree pension with no other income. My wife is an Australian citizen with US permanent residency. She has 6 months of 2006 income in Georgia as a RN and 4 months in Australia.

Are we required to include the Australian income for Fed/State tax filing? If so is it best to delay filing until we meet the physical presence requirements for foreign income exclusion.

Can I file part year resident for Georgia State taxes?

Am I required to file state taxes in subsequent years?

Thanks in advance for any and all help.
Maximus

[AtlantaTaxExpert]

Maximus:

Georgia issues first: You must file a part-year return for GA in 2006, claiming ONLY the income earned in GA. After that, you have NO obligation to file a GA return in successive years.

For the federal return, you are required to file a U.S. tax return and pay taxes on ALL world-wide income for as long as you remain a U.S. citizen. You can claim foreign tax credits for foreign income earned in 2006 by filing Form 1116.

In successive years, you would probably qualify for both the Foreign Income Exclusion (Form 2555) and Foreign Tax Credits (Form 1116).