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Department of the Treasury
Internal Revenue Service
Instructions for Form 2555
Foreign Earned Income
Section references are to the Internal Revenue Code.
Note: Specific rules apply to determine if
necessarily mean that your abode is in
General Instructions
you are a resident or nonresident alien of
the United States during that time.
the United States. See Pub. 519, U.S.
Do not include on Form 1040, line
Example. You are employed on an
!
Tax Guide for Aliens, for details.
59 (Federal income tax withheld),
offshore oil rig in the territorial waters of a
any taxes a foreign employer
foreign country and work a 28-day on/
CAUTION
withheld from your pay and paid to the
Who Qualifies
28-day off schedule. You return to your
foreign country’s tax authority instead of
family residence in the United States
You qualify for the tax benefits available
to the U.S. Treasury.
during your off periods. You are
to taxpayers who have foreign earned
considered to have an abode in the
income if both 1 and 2 apply.
A Change To Note
United States and do not meet the tax
1. You meet the tax home test (see
home test. You may not claim either of
The maximum foreign earned income
this page).
the exclusions or the housing deduction.
exclusion for 2001 has increased to
2. You meet either the bona fide
$78,000.
Violation of Travel Restrictions
residence test (see page 2) or the
physical presence test (see page 2).
Generally, if you were in a foreign country
What To Look for in 2002
in violation of U.S. travel restrictions, the
Note: If your only earned income from
following rules apply:
The maximum foreign earned income
work abroad is pay you received from the
exclusion for 2002 will increase to
1. Any time spent in that country may
U.S. Government as its employee, you do
$80,000.
not be counted in determining if you
not qualify for either of the exclusions or
qualify under the bona fide residence or
the housing deduction. Do not file Form
physical presence test,
Purpose of Form
2555.
2. Any income earned in that country
If you are a U.S. citizen or a U.S. resident
Tax home test. To meet this test, your
is not considered foreign earned income,
alien living in a foreign country, you are
tax home must be in a foreign country, or
and
subject to the same U.S. income tax laws
3. Any housing expenses in that
countries, throughout your period of bona
that apply to citizens and resident aliens
country (or housing expenses for your
fide residence or physical presence,
living in the United States. But if you
whichever applies. For this purpose, your
spouse or dependents in another country
qualify, use Form 2555 to exclude a
while you were in that country) are not
period of physical presence is the 330 full
limited amount of your foreign earned
considered qualified housing expenses.
days during which you were present in a
income. Also, use it to claim the housing
foreign country, not the 12 consecutive
See list on this page for countries to
exclusion or deduction. You may not
months during which those days
which U.S. travel restrictions apply.
exclude or deduct more than your foreign
occurred.
earned income for the tax year.
Additional Information
Your tax home is your regular or
You may be able to use Form
principal place of business, employment,
Pub. 54, Tax Guide for U.S. Citizens and
2555-EZ, Foreign Earned Income
or post of duty, regardless of where you
Resident Aliens Abroad, has more
Exclusion, if none of your foreign earned
maintain your family residence. If you do
information about the bona fide residence
income was from self-employment, your
not have a regular or principal place of
test, the physical presence test, the
total foreign earned income did not
business because of the nature of your
foreign earned income exclusion, and the
exceed $78,000, you do not have any
trade or business, your tax home is your
housing exclusion and deduction. You
business or moving expenses, and you
regular place of abode (the place where
can get this publication from most U.S.
do not claim the housing exclusion. For
you regularly live).
embassies and consulates or by writing
more details, see Form 2555-EZ and its
to: Eastern Area Distribution Center, P.O.
You are not considered to have a tax
separate instructions.
Box 85074, Richmond, VA 23261-5074.
home in a foreign country for any period
You can also download forms and
Foreign country. A foreign country is
during which your abode is in the United
publications from the IRS Web Site at
any territory (including the air space,
States. However, if you are temporarily
territorial waters, seabed, and subsoil)
present in the United States, or you
under the sovereignty of a government
maintain a dwelling in the United States
Waiver of Time Requirements
other than the United States. It does not
(whether or not that dwelling is used by
If your tax home was in a foreign country
include U.S. possessions or territories.
your spouse and dependents), it does not
and you were a bona fide resident of, or
physically present in, a foreign country
and had to leave because of war, civil
List of CountriesTo Which Travel Restrictions Apply
unrest, or similar adverse conditions, the
minimum time requirements specified
Time Periods
under the bona fide residence and
Country
Beginning
and
Ending
physical presence tests may be waived.
You must be able to show that you
Cuba
January 1, 1987
Still in effect
reasonably could have expected to meet
Iraq
August 2, 1990
Still in effect
the minimum time requirements if you had
Libya
January 1, 1987
Still in effect
not been required to leave. Each year the
IRS will publish in the Internal Revenue
Cat. No. 11901A