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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.

Who Qualifies

family residence in the United States

General Instructions

during your off periods. You are

You qualify for the tax benefits available

considered to have an abode in the

to taxpayers who have foreign earned

Do not include on Form 1040, line

United States and do not meet the tax

income if both 1 and 2 apply.

62 (Federal income tax withheld),

home test. You may not claim either of

any taxes a foreign employer

1. You meet the tax home test (see

CAUTION

the exclusions or the housing deduction.

withheld from your pay and paid to the

below).

foreign country’s tax authority instead of

2. You meet either the bona fide

Violation of Travel Restrictions

to the U.S. Treasury.

residence test (see page 2) or the

Generally, if you were in a foreign country

physical presence test (see page 2).

in violation of U.S. travel restrictions, the

A Change To Note

Note: If your only earned income from

following rules apply:

The maximum foreign earned income

work abroad is pay you received from the

1. Any time spent in that country may

U.S. Government as its employee, you do

exclusion for 2002 has increased to

not be counted in determining if you

not qualify for either of the exclusions or

$80,000.

qualify under the bona fide residence or

the housing deduction. Do not file Form

physical presence test,

2555.

Purpose of Form

2. Any income earned in that country

is not considered foreign earned income,

Tax home test. To meet this test, your

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

and

tax home must be in a foreign country, or

alien living in a foreign country, you are

3. Any housing expenses in that

countries, throughout your period of bona

subject to the same U.S. income tax laws

country (or housing expenses for your

fide residence or physical presence,

that apply to citizens and resident aliens

spouse or dependents in another country

whichever applies. For this purpose, your

living in the United States. But if you

while you were in that country) are not

period of physical presence is the 330 full

qualify, use Form 2555 to exclude a

considered qualified housing expenses.

days during which you were present in a

limited amount of your foreign earned

foreign country, not the 12 consecutive

income. Also, use it to claim the housing

See the list on this page for countries

months during which those days

exclusion or deduction. You may not

to which U.S. travel restrictions apply.

occurred.

exclude or deduct more than your foreign

earned income for the tax year.

Your tax home is your regular or

Additional Information

principal place of business, employment,

You may be able to use Form

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

or post of duty, regardless of where you

2555-EZ, Foreign Earned Income

Resident Aliens Abroad, has more

maintain your family residence. If you do

Exclusion, if none of your foreign earned

information about the bona fide residence

not have a regular or principal place of

income was from self-employment, your

business because of the nature of your

test, the physical presence test, the

total foreign earned income did not

foreign earned income exclusion, and the

trade or business, your tax home is your

exceed $80,000, you do not have any

housing exclusion and deduction. You

regular place of abode (the place where

business or moving expenses, and you

you regularly live).

can get this publication from most U.S.

do not claim the housing exclusion or

embassies and consulates or by writing

You are not considered to have a tax

deduction. For more details, see Form

to: Eastern Area Distribution Center, P.O.

home in a foreign country for any period

2555-EZ and its separate instructions.

Box 85074, Richmond, VA 23261-5074.

during which your abode is in the United

You can also download this publication

States. However, if you are temporarily

Foreign country. A foreign country is

(as well as other forms and publications)

present in the United States, or you

any territory (including the air space,

from the IRS Web Site at

maintain a dwelling in the United States

territorial waters, seabed, and subsoil)

(whether or not that dwelling is used by

under the sovereignty of a government

Waiver of Time Requirements

your spouse and dependents), it does not

other than the United States. It does not

If your tax home was in a foreign country

necessarily mean that your abode is in

include U.S. possessions or territories.

and you were a bona fide resident of, or

the United States during that time.

physically present in, a foreign country

Note: Specific rules apply to determine if

Example. You are employed on an

and had to leave because of war, civil

you are a resident or nonresident alien of

offshore oil rig in the territorial waters of a

unrest, or similar adverse conditions, the

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

foreign country and work a 28-day on/

minimum time requirements specified

Tax Guide for Aliens, for details.

28-day off schedule. You return to your

under the bona fide residence and

physical presence tests may be waived.

You must be able to show that you

List of Countries To Which Travel Restrictions Apply

reasonably could have expected to meet

the minimum time requirements if you had

Time Periods

not been required to leave. Each year the

Country

Beginning

and

Ending

IRS will publish in the Internal Revenue

Bulletin a list of countries and the dates

Cuba

January 1, 1987

Still in effect

they qualify for the waiver. If you left one

Iraq

August 2, 1990

Still in effect

of the countries during the period

Libya

January 1, 1987

Still in effect

indicated, you can claim the tax benefits

on Form 2555, but only for the number of

Cat. No. 11901A

Instructions For Form 2555 - Foreign Earned Income - Internal Revenue Service - 2002

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