Instructions For Form 2555-Ez - Foreign Earned Income Exclusion

Line 12

performed in a foreign country during the

You must enter dates in both

period for which you meet the tax home

Complete columns (a) through (d) if you

spaces provided on line 2b. Don't

TIP

test and either the bona fide residence test

were present in the United States or any of

enter “Continues” in the space for

or the physical presence test.

the ending date.

its possessions in 2016. Don't include time

Wages, salaries, tips, and bonuses.

spent in the United States or its

Noncash income (such as a home or

Note. A nonresident alien who, with a

possessions before your period of bona

car) if reported as income on Form 1040,

U.S. citizen or U.S. resident alien spouse,

fide residence or physical presence,

line 7.

chooses to be taxed as a resident of the

whichever applies, began or after it ended.

Allowances or reimbursements if

United States can qualify under this test if

Column (d). Enter, in U.S. dollars, the

reported as income on Form 1040, line 7.

the time requirements are met. See Pub.

amount of income earned in the United

Foreign earned income doesn't

54 for details on how to make this choice.

States on business (such as meetings or

include:

conventions). Attach a statement showing

Line 3

Income earned in the United States on

how you determined the amount. Don't

business ( Form 2555-EZ, line 12, column

include this income on line 17. Even if you

Tax Home Test

(d)),

live and work in a foreign country, any

Amounts paid to you by the U.S.

To meet this test, your tax home must be

income earned during the time spent in

Government or any of its agencies if you

in a foreign country, or countries (see

the United States on business is

were an employee of the U.S.

Foreign

country, earlier), throughout your

considered U.S. source income and can't

Government or any of its agencies,

period of bona fide residence or physical

be excluded.

Amounts that are actually a distribution

presence, whichever applies. For this

of corporate earnings or profits rather than

purpose, your period of physical presence

Line 14

a reasonable allowance as compensation

is the 330 full days during which you were

Enter the number of days in your

for your personal services,

present in a foreign country, not the 12

qualifying period that fall within 2016. Your

Amounts received after the end of the

consecutive months during which those

qualifying period is the period during

tax year following the tax year in which you

days occurred.

performed the services, or

which you meet the tax home test and

Amounts you must include in gross

either the bona fide residence test or the

Your tax home is your regular or

physical presence test.

income because of your employer's

principal place of business, employment,

contributions to a nonexempt employees'

Example. You establish a tax home and

or post of duty, regardless of where you

trust or to a nonqualified annuity contract.

bona fide residence in a foreign country on

maintain your family residence. If you don't

August 14, 2016. You maintain the tax

Income earned in prior year. Foreign

have a regular or principal place of

home and residence until January 31,

earned income received in 2016 for

business because of the nature of your

2018. The number of days in your

services you performed in 2015 can be

trade or business, your tax home is your

excluded from your 2016 gross income if,

qualifying period that fall within 2016 is

regular place of abode (the place where

140 (August 14 through December 31,

and to the extent, the income would have

you regularly live).

2016).

been excludable if you had received it in

2015.

You aren't considered to have a tax

Line 17

home in a foreign country for any period

If you are excluding income under this

during which your abode is in the United

rule, don't include this income on line 17.

Enter the total foreign earned income you

States. However, if you are temporarily

Instead, attach a statement to Form

earned and received in 2016. Report the

present in the United States, or you

2555-EZ showing how you figured the

amount in U.S. dollars using the exchange

maintain a dwelling in the United States

exclusion. Enter the amount that would

rates in effect when you actually received

(whether or not that dwelling is used by

have been excludable in 2015 on Form

the income. If you are a cash-basis

your spouse and dependents), it doesn't

2555-EZ to the left of line 18. Next to the

taxpayer, include in income on Form 1040

necessarily mean that your abode is in the

amount enter “Exclusion of Income

the foreign earned income you received in

United States during that time.

Earned in 2015.” Include it in the total

2016 regardless of when you earned it.

reported on line 18.

(For example, include wages on Form

Example. You are employed on an

1040, line 7.)

offshore oil rig in the territorial waters of a

Note. If you claimed any deduction,

foreign country and work a 28-day on/

credit, or exclusion on your 2015 return

Income is earned in the year you

28-day off schedule. You return to your

that is definitely related to the 2015 foreign

performed the services for which you

family residence in the United States

earned income you are excluding under

received the pay. But if you received your

during your off periods. You are

this rule, you may have to amend your

last wage or salary payment for 2015 in

considered to have an abode in the United

2015 income tax return to adjust the

2016 because of your employer's payroll

States and don't meet the tax home test.

amount claimed. To do this, file Form

period, that income can be treated as

You can't claim the foreign earned income

1040X.

earned in 2016. If you can't treat that wage

exclusion.

or salary payment as earned in 2016, the

rules explained later under

Income earned

Line 4

in prior year

apply. See Pub. 54 for more

Enter your entire address including city,

details.

province or state, country, and postal

Note. If your total foreign earned income

code. If using a military or diplomatic

entered on line 17 is over $101,300, do

address, include the country in which you

not file Form 2555-EZ. You must file Form

are living or stationed.

2555 instead.

Line 11

Foreign earned income. For purposes

Enter your tax home(s) and date(s)

of this form, foreign earned income means

established on line 11a. See

Tax Home

only the following types of income

Test

under Line 3, earlier.

received for personal services you

Instructions for Form 2555-EZ (2016)

-3-

Instructions For Form 2555-Ez - Foreign Earned Income Exclusion - 2016 Page 3

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