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2 0 07

Department of the Treasury

Internal Revenue Service

Instructions for Form

2555-EZ

Foreign Earned Income Exclusion

Note. If your only earned income from

physical presence tests may be waived.

General Instructions

work abroad is pay you received from the

You must be able to show that you

U.S. Government as its employee, you do

reasonably could have expected to meet

Do not include on Form 1040, line

not qualify for the foreign earned income

the minimum time requirements if you had

64 (federal income tax withheld),

exclusion. Do not file Form 2555-EZ.

not been required to leave. Each year the

any taxes a foreign employer

CAUTION

IRS will publish in the Internal Revenue

Married Couples

withheld from your pay and paid to the

Bulletin a list of countries and the dates

foreign country’s tax authority instead of

If both you and your spouse qualify for,

they qualify for the waiver. If you left one

to the U.S. Treasury.

and choose to claim, the foreign earned

of the countries during the period

income exclusion, figure the amount of

indicated, you can claim the foreign

What’s New for 2007

the exclusion separately for each of you.

earned income exclusion on Form

You must each complete separate Forms

2555-EZ, but only for the number of days

Exclusion amount. For 2007, the

2555-EZ.

you were a bona fide resident of, or

maximum exclusion has increased to

physically present in, the foreign country.

$85,700.

Community income. The amount of the

exclusion is not affected by the

If you can claim the foreign earned

Purpose of Form

income-splitting provisions of community

income exclusion because of the waiver

property laws. The sum of the amounts

of time requirements, attach a statement

If you qualify, you can use Form 2555-EZ

figured separately for each of you is the

to your return explaining that you

instead of Form 2555, Foreign Earned

total amount excluded on a joint return.

expected to meet the applicable time

Income, to exclude a limited amount of

requirement, but the conditions in the

your foreign earned income. You cannot

Travel to Cuba

foreign country prevented you from the

exclude more than your foreign earned

normal conduct of business. Also, enter

income for the year.

Generally, if you were in Cuba in violation

“Claiming Waiver” in the top margin on

of U.S. travel restrictions, the following

U.S. citizens and U.S. resident aliens

page 1 of your 2007 Form 2555-EZ.

rules apply.

living in a foreign country are subject to

•

Any time spent in Cuba cannot be

the same U.S. income tax laws that apply

When To File

counted in determining if you qualify

to citizens and resident aliens living in the

under the bona fide residence or physical

Form 1040 is generally due April 15,

United States.

presence test.

2008.

•

Note. Specific rules apply to determine if

Any income earned in Cuba is not

However, you are automatically

you are a resident or nonresident alien of

considered foreign earned income.

granted a 2-month extension of time to

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

Note. If you performed services at the

file (to June 16, 2008) if, on the due date

Tax Guide for Aliens, for details.

U.S. Naval Base at Guantanamo Bay,

of your return, you live outside the United

you were not in violation of U.S. travel

Who Qualifies

States and Puerto Rico and your tax

restrictions.

home (defined later) is outside the United

You can use Form 2555-EZ to claim the

States and Puerto Rico. If you take this

foreign earned income exclusion if all of

Additional Information

extension, you must attach a statement to

the following apply.

your return explaining that you meet

•

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

You meet the seven conditions listed at

these two conditions.

Resident Aliens Abroad, has more

the top of Form 2555-EZ.

•

information about the bona fide residence

The automatic 2-month extension also

Your total foreign earned income

test, the physical presence test, and the

applies to paying the tax. However,

received in 2007 is reported on Form

foreign earned income exclusion. You can

interest is charged on the unpaid tax from

1040, line 7.

•

get this publication from most U.S.

the regular due date until it is paid.

You do not have a housing deduction

embassies and consulates or by writing

carryover from 2006.

Special extension of time. The first

•

to: National Distribution Center, P.O. Box

You meet either the bona fide

year you plan to take the foreign earned

8903, Bloomington, IL 61702-8903. You

residence test (see the instructions for

income exclusion, you may not expect to

can also download this publication (as

lines 1a and 1b on page 2) or the physical

qualify until after the automatic 2-month

well as other forms and publications) from

presence test (see the instructions for

extension period described above. If this

the IRS website at

lines 2a and 2b on page 2).

occurs, you can apply for an extension to

•

You meet the tax home test (see the

a date after you expect to qualify.

Waiver of Time

instructions for line 3 on page 2).

To apply for this extension, complete

Requirements

Foreign country. A foreign country is

and file Form 2350, Application for

any territory (including the airspace,

If your tax home was in a foreign country

Extension of Time To File U.S. Income

territorial waters, seabed, and subsoil)

and you were a bona fide resident of, or

Tax Return, with the Department of the

under the sovereignty of a government

physically present in, a foreign country

Treasury, Internal Revenue Service

other than the United States.

and had to leave because of war, civil

Center, Austin, TX 73301-0215, before

The term “foreign country” does not

unrest, or similar adverse conditions, the

the due date of your return. Interest is

include U.S. possessions or territories. It

minimum time requirements specified

charged on the tax not paid by the regular

does not include the Antarctic region.

under the bona fide residence and

due date as explained earlier.

Cat. No. 14623P

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

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