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Department of the Treasury

Internal Revenue Service

Instructions for Form 2555

Foreign Earned Income

months during which those days

8903, Bloomington, IL 61702-8903. You

Section references are to the Internal

occurred.

can also download this publication (as

Revenue Code unless otherwise noted.

well as other forms and publications) from

Your tax home is your regular or

General Instructions

the IRS website at

principal place of business, employment,

or post of duty, regardless of where you

Waiver of Time Requirements

Do not include on Form 1040, line

maintain your family residence. If you do

If your tax home was in a foreign country

64 (federal income tax withheld),

not have a regular or principal place of

and you were a bona fide resident of, or

any taxes a foreign employer

CAUTION

business because of the nature of your

physically present in, a foreign country

withheld from your pay and paid to the

trade or business, your tax home is your

and had to leave because of war, civil

foreign country’s tax authority instead of

regular place of abode (the place where

unrest, or similar adverse conditions, the

to the U.S. Treasury.

you regularly live).

minimum time requirements specified

You are not considered to have a tax

What’s New for 2007

under the bona fide residence and

home in a foreign country for any period

physical presence tests may be waived.

Exclusion amount. For 2007, the

during which your abode is in the United

You must be able to show that you

maximum exclusion has increased to

States. However, if you are temporarily

reasonably could have expected to meet

$85,700.

present in the United States, or you

the minimum time requirements if you had

maintain a dwelling in the United States

not been required to leave. Each year the

Purpose of Form

(whether or not that dwelling is used by

IRS will publish in the Internal Revenue

your spouse and dependents), it does not

Bulletin a list of countries and the dates

If you are a U.S. citizen or a U.S. resident

necessarily mean that your abode is in

they qualify for the waiver. If you left one

alien living in a foreign country, you are

the United States during that time.

of the countries during the period

subject to the same U.S. income tax laws

Example. You are employed on an

indicated, you can claim the tax benefits

that apply to citizens and resident aliens

offshore oil rig in the territorial waters of a

on Form 2555, but only for the number of

living in the United States. But if you

foreign country and work a 28-day on/

days you were a bona fide resident of, or

qualify, use Form 2555 to exclude a

28-day off schedule. You return to your

physically present in, the foreign country.

limited amount of your foreign earned

family residence in the United States

income. Also, use it to claim the housing

If you can claim either of the

during your off periods. You are

exclusion or deduction. You cannot

exclusions or the housing deduction

considered to have an abode in the

exclude or deduct more than your foreign

because of the waiver of time

United States and do not meet the tax

earned income for the tax year.

requirements, attach a statement to your

home test. You cannot claim either of the

return explaining that you expected to

You may be able to use Form

exclusions or the housing deduction.

meet the applicable time requirement, but

2555-EZ, Foreign Earned Income

Foreign country. A foreign country is

the conditions in the foreign country

Exclusion, if you did not have any

any territory (including the airspace,

prevented you from the normal conduct of

self-employment income for the year,

territorial waters, seabed, and subsoil)

business. Also, enter “Claiming Waiver” in

your total foreign earned income did not

under the sovereignty of a government

the top margin on page 1 of your 2007

exceed $85,700, you do not have any

other than the United States.

Form 2555.

business or moving expenses, and you

The term “foreign country” does not

do not claim the housing exclusion or

When To File

include U.S. possessions or territories. It

deduction. For more details, see Form

does not include the Antarctic region.

A 2007 calendar year Form 1040 is

2555-EZ and its separate instructions.

generally due April 15, 2008.

Travel to Cuba

Note. Specific rules apply to determine if

However, you are automatically

you are a resident or nonresident alien of

Generally, if you were in Cuba in violation

granted a 2-month extension of time to

the United States. See Pub. 519, U.S.

of U.S. travel restrictions, the following

file (to June 16, 2008, for a 2007 calendar

rules apply:

Tax Guide for Aliens, for details.

•

year return) if, on the due date of your

Any time spent in Cuba cannot be

return, you live outside the United States

counted in determining if you qualify

Who Qualifies

and Puerto Rico and your tax home

under the bona fide residence or physical

You qualify for the tax benefits available

(defined earlier) is outside the United

presence test,

•

to taxpayers who have foreign earned

States and Puerto Rico. If you take this

Any income earned in Cuba is not

income if both of the following apply.

extension, you must attach a statement to

considered foreign earned income, and

•

You meet the tax home test (discussed

your return explaining that you meet

Any housing expenses in Cuba (or

later on this page).

these two conditions.

housing expenses for your spouse or

•

You meet either the bona fide

dependents in another country while you

The automatic 2-month extension also

residence test (see page 2) or the

were in Cuba) are not considered

applies to paying the tax. However,

physical presence test (see page 2).

qualified housing expenses.

interest is charged on the unpaid tax from

the regular due date (April 15, 2008, for a

Note. If your only earned income from

Note. If you performed services at the

2007 calendar year return) until it is paid.

work abroad is pay you received from the

U.S. Naval Base at Guantanamo Bay,

U.S. Government as its employee, you do

you were not in violation of U.S. travel

Special extension of time. The first

not qualify for either of the exclusions or

restrictions.

year you plan to take the foreign earned

the housing deduction. Do not file Form

income exclusion and/or the housing

Additional Information

2555.

exclusion or deduction, you may not

expect to qualify until after the automatic

Tax home test. To meet this test, your

Pub. 54, Tax Guide for U.S. Citizens and

2-month extension period described

tax home must be in a foreign country, or

Resident Aliens Abroad, has more

earlier. If this occurs, you can apply for an

countries (see Foreign country, later),

information about the bona fide residence

extension to a date after you expect to

throughout your period of bona fide

test, the physical presence test, the

qualify.

residence or physical presence,

foreign earned income exclusion, and the

whichever applies. For this purpose, your

housing exclusion and deduction. You

To apply for this extension, complete

period of physical presence is the 330 full

can get this publication from most U.S.

and file Form 2350, Application for

days during which you were present in a

embassies and consulates or by writing

Extension of Time To File U.S. Income

foreign country, not the 12 consecutive

to: National Distribution Center, P.O. Box

Tax Return, with the Department of the

Cat. No. 11901A

Instructions For Form 2555 - Foreign Earned Income - Internal Revenue Service - 2007

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