My employer paid tax to the foreign country, but none of it was U.S. withholding. Can I treat it like federal withholding on Form 1040?
I am from Spain and became a U.S. resident while still receiving compensation from a foreign employer. The employer withheld Spanish income tax, and I initially assumed it could go on the withholding line of the U.S. return the same way as a U.S. paycheck. My tax software is pushing me toward foreign tax credit treatment instead.
I need to know whether foreign payroll tax paid to Spain can ever be entered as if it were federal withholding, or whether it belongs only in the foreign tax credit analysis.
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