I'm a citizen of Norway as well as of the US by birth. I've never before 2014 resided in the US. I'm a PhD student in my native Norway, but we are here considered employees and paid a wage. I've understood that I need to file with the IRS every year and declare this income, and that I can use the foreign earned income exclusion so that I don't have to pay any US tax.
Now, as part of my PhD work I in 2014 visited a US university, and resided in the country for about half the year. During this period, I was paid as normal by my employer (my home university), and my home country deducted ordinary income tax from this pay. The money was paid into my Norwegian bank account as it always has - I have no accounts in the US.
When filing my 2014 IRS return, I'm confused. Maybe someone can enlighten me with regards to the following:
Can I use the foreign earned income exclusion in my situation?
If not, how should I go about this to avoid being doubly taxed for 2014?
It seems that Norway has a bilateral tax treaty with the US, that, if I'm reading it correctly, seems to indicate that "visiting researchers to universities" (which really seems like I would qualify as) should not be taxed by either country for the duration of their stay. This seems too good to be true, and not really something I'm aiming for (I'll happily pay my taxes at home - I just want to make sure I don't pay twice), but if it were true, how does one go about filing IRS returns based on such treaties? Is it even something one can do on one's own?
I didn't even give a thought to state taxes; those should only apply to income sourced from the state I lived in, right (AKA $0)?