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Other Rules Foreign-earned income: Foreign-earned income means wages, salaries, professional fees, or other amounts paid to you for personal services rendered by you. ... Self-employment income: A qualifying individual may claim the foreign earned income exclusion on foreign earned self-employment income.
( Sec. 39-22-303(10), C.R.S.; Reg. 39-22-303.10, C.C.R.; Instructions, Form 112, Corporation Income Tax Return; Colorado Corporate Income Tax Guide, Colorado Department of Revenue, January 2021 ) Excludable "foreign source income" is defined as taxable income from sources outside the United States as used in IRC Sec.
Under certain circumstances, the Colorado income tax for multiple affiliated C corporations may be determined collectively, with the filing of a combined, consolidated, or combined/consolidated return.
Key Takeaways. Income excluded from the IRS's calculation of your income tax includes life insurance death benefit proceeds, child support, welfare, and municipal bond income. The exclusion rule is generally, if your "income" cannot be used as or to acquire food or shelter, it's not taxable.
Finally, if a foreign tax credit is claimed, the foreign-source income exclusion is computed via the following formula: (Foreign source income ? IRC Section 78 gross up) x (Foreign taxes paid or accrued / ((federal income tax / federal taxable income) / foreign source income))).
In Colorado, on the other hand, as a single-member LLC, you are only required to file federal income tax as the state does not impose a state income tax.
A partnership or S corporation may file a composite income tax return for its nonresident partners or shareholders, as a simplified way of paying the income tax owed by those partners or shareholders.
However, all foreign income that is exempt for federal purposes is also exempt for Colorado purposes. Individuals who abandon their Colorado domicile and become permanent residents of a foreign country no longer have to file Colorado returns.