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days you were a bona fide resident of, or

Earned income credit. You cannot take

were present in a foreign country during

physically present in, the foreign country.

the earned income credit if you claim

the 12-month period shown on line 16.

either of the exclusions or the housing

The 330 full days may be interrupted by

If you can claim either of the

deduction.

periods when you are traveling over

exclusions or the housing deduction

international waters or are otherwise not

because of the waiver of time

in a foreign country. See Pub. 54 for more

requirements, attach a statement to your

information and examples.

Specific Instructions

return explaining that you expected to

meet the applicable time requirement, but

Note: A nonresident alien who, with a

the conditions in the foreign country

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

Part II

prevented you from the normal conduct of

chooses to be taxed as a resident of the

business. Also, enter “Claiming Waiver” in

United States may qualify under this test

Bona Fide Residence Test

the top margin on page 1 of your 2002

if the time requirements are met. See

To meet this test, you must be one of the

Form 2555.

Pub. 54 for details on how to make this

following:

choice.

•

When To File

A U.S. citizen who is a bona fide

resident of a foreign country, or countries,

Part IV

A 2002 calendar year Form 1040 is

for an uninterrupted period that includes

generally due April 15, 2003.

Enter in this part the total foreign earned

an entire tax year (January 1 – December

However, you are automatically

income you earned and received

31, if you file a calendar year return) or

•

granted a 2-month extension of time to

(including income constructively received)

A U.S. resident alien who is a citizen or

file (to June 16, 2003, for a 2002 calendar

during the tax year. If you are a cash

national of a country with which the

year return) if, on the due date of your

basis taxpayer, report on Form 1040 all

United States has an income tax treaty in

return, you live outside the United States

income you received during the tax year

effect and who is a bona fide resident of a

and Puerto Rico and your tax home

regardless of when you earned it.

foreign country, or countries, for an

(defined on page 1) is outside the United

uninterrupted period that includes an

Income is earned in the tax year you

States and Puerto Rico. If you take this

entire tax year (January 1 – December

perform the services for which you

extension, you must attach a statement to

31, if you file a calendar year return). See

receive the pay. But if you are a cash

your return explaining that you meet

Pub. 901, U.S. Tax Treaties, for a list of

basis taxpayer and, because of your

these two conditions.

countries with which the United States

employer’s payroll periods, you received

The automatic 2-month extension also

has an income tax treaty in effect.

your last salary payment for 2001 in 2002,

applies to paying the tax. However,

No specific rule determines if you are a

that income may be treated as earned in

interest is charged on the unpaid tax from

bona fide resident of a foreign country

2002. If you cannot treat that salary

the regular due date (April 15, 2003, for a

because the determination involves your

payment as income earned in 2002, the

2002 calendar year return) until it is paid.

intention about the length and nature of

rules explained below under Income

your stay. Evidence of your intention may

Special extension of time. The first year

earned in prior year apply. See Pub. 54

be your words and acts. If these conflict,

you plan to take the foreign earned

for more details.

your acts carry more weight than your

income exclusion and/or the housing

Foreign earned income for this

words. Generally, if you go to a foreign

exclusion or deduction, you may not

purpose means wages, salaries,

country for a definite, temporary purpose

expect to qualify until after the automatic

professional fees, and other

and return to the United States after you

2-month extension period described

compensation received for personal

accomplish it, you are not a bona fide

earlier. If this occurs, you may apply for

services you performed in a foreign

resident of the foreign country. If

an extension to a date after you expect to

country during the period for which you

accomplishing the purpose requires an

qualify.

meet the tax home test and either the

extended, indefinite stay, and you make

To apply for this extension, complete

bona fide residence test or the physical

your home in the foreign country, you

and file Form 2350, Application for

presence test. It also includes noncash

may be a bona fide resident. See Pub. 54

Extension of Time To File U.S. Income

income (such as a home or car) and

for more information and examples.

Tax Return, with the Internal Revenue

allowances or reimbursements.

Lines 13a and 13b. If you submitted a

Service Center, Philadelphia, PA 19255,

Foreign earned income does not

statement of nonresidence to the

before the due date of your return.

include amounts that are actually a

authorities of a foreign country in which

Interest is charged on the tax not paid by

distribution of corporate earnings or

you earned income and the authorities

the regular due date as explained earlier.

profits rather than a reasonable allowance

hold that you are not subject to their

as compensation for your personal

Choosing the Exclusion(s)

income tax laws by reason of

services. It also does not include the

nonresidency in the foreign country, you

To choose either of the exclusions,

following types of income.

are not considered a bona fide resident of

•

complete the appropriate parts of Form

Pension and annuity income (including

that country.

2555 and file it with your Form 1040 or

social security and railroad retirement

If you submitted such a statement and

Form 1040X, Amended U.S. Individual

benefits treated as social security).

the authorities have not made an adverse

•

Income Tax Return. Your initial choice to

Interest, ordinary dividends, capital

determination of your nonresident status,

claim the exclusion must usually be made

gains, alimony, etc.

you are not considered a bona fide

•

on a timely filed return (including

Portion of 2001 moving expense

resident of that country.

extensions) or on a return amending a

deduction allocable to 2002 that is

timely filed return. However, there are

included in your 2002 gross income. For

Part III

exceptions. See Pub. 54 for details.

details, see Recapture of moving

Once you choose to claim an

expense deduction under Moving

Physical Presence Test

exclusion, that choice remains in effect for

Expenses in Pub. 54.

•

To meet this test, you must be a U.S.

that year and all future years unless it is

Amounts paid to you by the U.S.

citizen or resident alien who is physically

revoked. To revoke your choice, you must

Government or any of its agencies if you

present in a foreign country, or countries,

attach a statement to your return for the

were an employee of the U.S.

for at least 330 full days during any

first year you do not wish to claim the

Government or any of its agencies.

•

period of 12 months in a row. A full day

exclusion(s). If you revoke your choice,

Amounts received after the end of the

means the 24-hour period that starts at

you may not claim the exclusion(s) for

tax year following the tax year in which

midnight.

your next 5 tax years without the approval

you performed the services.

•

of the Internal Revenue Service. See

To figure the minimum of 330 full days’

Amounts you must include in gross

Pub. 54 for more information.

presence, add all separate periods you

income because of your employer’s

-2-

Instructions For Form 2555 - Foreign Earned Income - Internal Revenue Service - 2002 Page 2

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