Can't figure this out.

We have TurboTax.

C. has a W-2 and a T-4. None of the income on the W-2 is reported on the T-4 or vice versa.

I understand we need to report (and then exclude) his income from Canada. But I can't figure out how to do this. If we try to enter it just as excluded foreign income, it either deducts his Canadian income (without adding it first), or it says he's not eligible because he wasn't a bonafide resident of Canada in 2007.

Anyone with Turbo Tax know what to do? Do I need to first report the T-4 as income separately and then deduct it?

We weren't able to use turbo tax for my first partial year here after I arrived in the US. We had to use the paper forms and file that way in order to allow my Canadian income to be added to our total income, then deduct back out the Foreign Tax Credit. It was a nuisance but it worked. We have used Turbo tax ever since, though.

(While our tax returns for that year were audited by the IRS it had nothing to do with the foreign income or tax credit - it was the alimony my husband pays to his ex -we figure she 'neglected' to claim all of it! The audit cleared us and they accepted the total amount of our claimed deduction. )

Alright, now I entered it under 'Other Wages', and took the exclusion, but now it dropped our expected refund. How does adding it in and excluding it make us get less money?