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How do I Claim Foreign Earned Income Exclusion?

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How do I Claim Foreign Earned Income Exclusion?


Purpose of Form

If you are a U.S. citizen or a U.S. resident alien living in a foreign country, you are subject to the same U.S. income tax laws that apply to citizens and resident aliens living in the United States. But if you qualify, use Form 2555 to exclude a limited amount of your foreign earned income. Also, use it to claim the housing exclusion or deduction. You cannot exclude or deduct more than your foreign earned income for the tax year.

You may be able to use Form 2555-EZ, Foreign Earned Income Exclusion, if you did not have any self-employment income for the year, your total foreign earned income did not exceed $91,400, you do not have any business or moving expenses, and you do not claim the housing exclusion or deduction. For more details, see Form 2555-EZ and its separate instructions.

Note.   Specific rules apply to determine if you are a resident or nonresident alien of the United States. See Pub. 519, U.S. Tax Guide for Aliens, for details.

Who Qualifies

You qualify for the tax benefits available to taxpayers who have foreign earned income if both of the following apply.

  • You meet the tax home test.

  • You meet either the bona fide residence test or the physical presence test

Exclusion amount.   The maximum foreign earned income exclusion is now adjusted annually for inflation.

For more information on Foreign Earned Income Exclusion and how to meet the tests to qualify for the exclusion, please see Form 2555 Instructions.


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Views: 317 Created on: Jun 15, 2013
Date updated: Nov 17, 2014

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