That's a great point I completely overlooked! Do you know if Georgia specifically has any special rules for this? Or where I should look to find out? I've been so focused on the federal side I haven't even thought about state implications.

Georgia does tax residents on worldwide income, unfortunately. You'll need to file Georgia Form 500 and report all income, including what you earned in Canada. Georgia doesn't automatically respect federal treaty positions, but they do allow a credit for taxes paid to foreign countries to avoid double taxation. Look for the "Credit for Taxes Paid to Another State or Country" section on your Georgia return. The credit is limited to the amount of Georgia tax attributable to the foreign income. The Georgia Department of Revenue website has detailed instructions, or you can call them directly at 1-877-423-6711 for clarification on your specific situation.

Adding to this great advice - if you didn't make the QEF election in the first year you held the PFIC, you might be able to make a late election using a "purging" procedure, but it's complicated and might result in immediate taxation of accumulated earnings. Sometimes it's still worth it to avoid the punitive default PFIC tax regime going forward. Also, keep an eye on the exchange rate fluctuations! The IRS allows several methods for currency conversion, and choosing the right one can make a significant difference in your tax liability.

I don't think I have any debts like that. My student loans are current and I don't have kids or back taxes that I know of. Would they at least notify me if they were taking my refund for something? This silence is what's killing me.

They should definitely send you a notice in the mail if they're offsetting your refund for any debt, but sometimes those notices arrive after they've already adjusted your refund. The Treasury Offset Program handles these situations, and they're required to notify you, but the timing isn't always great. If you're concerned, you can call the Treasury Offset Program directly at 800-304-3107 to see if you have any federal debts in the system that might affect your refund. They can tell you immediately if there's anything on file that would cause an offset, even before the IRS processes your return fully.

The app uses the same database as the website, so the information should be identical. The only difference is sometimes the app refreshes more frequently than the website during high traffic periods. I work in IT and know people who've worked on government systems - it's all pulling from the same data.

Thanks for the insight from the retail perspective. Do you think I should just go ahead and sign their paperwork to get my money back, or try to push back on the 1099-MISC part? I'm worried that signing means I'm agreeing to their classification of this as something other than a simple refund.

I would go ahead and sign to get your money back. Fighting them on the 1099 issue will likely just delay your refund further, and you've already waited almost a year. The important thing is how YOU handle it on your tax return, not how they classify it. When you file your taxes, you can properly categorize it as a refund rather than income regardless of what form they send. Just keep good documentation of the original purchase, the return attempt, and all communications about this being a refund for a returned item. That way, if there's ever a question, you have clear evidence this wasn't income.

Good point about the extra compensation. When I had a dispute with an online retailer, they refunded my original $200 purchase but added an extra $50 for my trouble. Only the $50 was considered taxable income.

This is really helpful! How did you calculate the value of housing and food to determine that you provided more than half her support? I'm trying to figure out how to quantify that properly.

For housing, I used the fair rental value of the room she stayed in (looked at comparable rooms for rent in our area) plus a percentage of utilities based on our household size. For food, I tracked grocery expenses for a couple months and calculated her portion based on that. I also included car insurance since we added her to our policy, cell phone costs since she was on our family plan, and medical expenses we covered. For her part of the support equation, I included her earnings from her part-time job, scholarships that covered room and board (not tuition), and any other financial help she received. The IRS has a worksheet in Publication 501 that helps with this calculation. The key is being able to show that your contribution exceeded 50% of her total support from all sources. In our case, the housing value alone was significant enough to clearly demonstrate we provided most of her support.

On TurboTax you should select "Other" when it asks for the relationship. Then when it asks if this person lived with you all year, select "Yes" (assuming they did, or if they were away at college but your home was their main residence). There's also a section where it will ask you to verify that you provided more than half their support.

Oh crap, I had no idea there was a 3-year deadline on refunds! That's really good to know. Do you think we should use a tax service like Jackson Hewitt at this point or just try to do it ourselves with tax software?

For a simple tax situation, tax software should work fine and save you money compared to Jackson Hewitt. Something like TurboTax or FreeTaxUSA can handle late filings easily. If her taxes are more complicated (self-employment, multiple income sources, investments, etc.), then a professional service might be worth the cost. They sometimes catch deductions or credits you might miss on your own. But for basic W-2 income, the software should be more than adequate and much cheaper.

Exactly! IRS is the worst bank ever... they take your money all year and don't even pay interest when they owe you a refund, but they sure charge interest when you owe them 😑