Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abord - 2011 Page 18
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44services performed, or to be performed, in an-
company policy that is reduced to writing before
United States or any of its agencies to its em-
other tax year. You must report the reimburse-
your move to the foreign country, your employer
ployees. This includes amounts paid from both
ment as income on your return in the year you
appropriated and nonappropriated funds.
will reimburse you for your move back to the
receive it, even if it is considered earned during
United States regardless of whether you con-
The following organizations (and other orga-
a different year.
tinue to work for the employer, the includible
nizations similarly organized and operated
reimbursement is considered compensation for
under United States Army, Navy, or Air Force
Move from U.S. to foreign country. If you
regulations) are integral parts of the Armed
past services performed in the foreign country.
move from the United States to a foreign coun-
Forces, agencies, or instrumentalities of the
The includible reimbursement is considered
try, your moving expense reimbursement is gen-
United States.
earned in the year of the move if you qualify for
erally considered pay for future services to be
the foreign earned income exclusion for a period
•
performed at the new location. The reimburse-
United States Armed Forces exchanges.
that includes at least 120 days during that year.
ment is considered earned solely in the year of
•
Commissioned and noncommissioned of-
Otherwise, you treat the includible reimburse-
the move if you qualify for the exclusion for a
ficers’ messes.
ment as received for services performed in the
period that includes at least 120 days during that
foreign country in the year of the move and the
•
tax year.
Armed Forces motion picture services.
year immediately before the year of the move.
If you are neither a bona fide resident of nor
•
Kindergartens on foreign Armed Forces in-
physically present in a foreign country or coun-
See the discussion under
Move from U.S. to
stallations.
tries for a period that includes 120 days during
foreign
country, earlier, to figure the amount of
the year of the move, a portion of the reimburse-
the includible reimbursement considered
Amounts paid by the United States or its
ment is considered earned in the year of the
earned in the year of the move. The amount
agencies to persons who are not their employ-
move and a portion is considered earned in the
earned in the year before the year of the move is
ees may qualify for exclusion or deduction.
year following the year of the move. To figure the
the difference between the total includible reim-
If you are a U.S. Government employee paid
amount earned in the year of the move, multiply
bursement and the amount earned in the year of
by a U.S. agency that assigned you to a foreign
the reimbursement by a fraction. The numerator
the move.
government to perform specific services for
(top number) is the number of days in your
which the agency is reimbursed by the foreign
qualifying period that fall within the year of the
Example. You are a U.S. citizen employed
government, your pay is from the U.S. Govern-
move, and the denominator (bottom number) is
in a foreign country. You retired from employ-
ment and does not qualify for exclusion or de-
the total number of days in the year of the move.
ment with your employer on March 31, 2011,
duction.
The difference between the total reimburse-
and returned to the United States after having
If you have questions about whether you are
ment and the amount considered earned in the
been a bona fide resident of the foreign country
an employee or an independent contractor, get
year of the move is the amount considered
for several years. A written agreement with your
Publication 15-A, Employer’s Supplemental Tax
earned in the year following the year of the
employer entered into before you went abroad
Guide.
move. The part earned in each year is figured as
provided that you would be reimbursed for your
shown in the following example.
move back to the United States.
American Institute in Taiwan. Amounts paid
In April 2011, your former employer reim-
by the American Institute in Taiwan are not for-
Example. You are a U.S. citizen working in
bursed you $4,000 for the part of the cost of your
eign earned income for purposes of the foreign
the United States. You were told in October
move back to the United States that you were
earned income exclusion, the foreign housing
2010 that you were being transferred to a foreign
not allowed to deduct. Because you were not a
exclusion, or the foreign housing deduction. If
country. You arrived in the foreign country on
bona fide resident of a foreign country or coun-
you are an employee of the American Institute in
December 15, 2010, and you are a bona fide
tries for a period that included at least 120 days
Taiwan, allowances you receive are exempt
resident for the remainder of 2010 and all of
in 2011 (the year of the move), the includible
from U.S. tax up to the amount that equals
2011. Your employer reimbursed you $2,000 in
reimbursement is considered pay for services
tax-exempt allowances received by civilian em-
January 2011 for the part of the moving expense
performed in the foreign country for both 2011
ployees of the U.S. Government.
that you were not allowed to deduct. Because
and 2010.
you did not qualify for the exclusion under the
Allowances. Cost-of-living and foreign-area
You figure the part of the moving expense
bona fide residence test for at least 120 days in
allowances paid under certain acts of Congress
reimbursement for services performed in the
2010 (the year of the move), the reimbursement
to U.S. civilian officers and employees stationed
is considered pay for services performed in the
foreign country for 2011 by multiplying the total
in Alaska and Hawaii or elsewhere outside the
foreign country for both 2010 and 2011.
includible reimbursement by a fraction. The frac-
48 contiguous states and the District of Colum-
tion is the number of days of foreign residence
You figure the part of the reimbursement for
bia can be excluded from gross income. Post
during the year (90) divided by the number of
services performed in the foreign country in
differentials are wages that must be included in
2010 by multiplying the total reimbursement by a
days in the year (365). The remaining part of the
gross income, regardless of the act of Congress
fraction. The fraction is the number of days dur-
includible reimbursement is for services per-
under which they are paid.
ing which you were a bona fide resident in 2010
formed in the foreign country in 2010. You report
(the year of the move) divided by 365. The
the amount of the includible reimbursement in
More information. Publication 516, U.S. Gov-
remaining part of the reimbursement is for serv-
2011, the year you received it.
ernment Civilian Employees Stationed Abroad,
ices performed in the foreign country in 2011.
has more information for U.S. Government em-
In this example, if you met the physical
This computation is used only to determine
ployees abroad.
presence test for a period that included
TIP
when the reimbursement is considered earned.
at least 120 days in 2011, the moving
You would include the amount of the reimburse-
expense reimbursement would be considered
ment in income in 2011, the year you received it.
Exclusion of
earned entirely in the year of the move.
Meals and Lodging
Move between foreign countries. If you
Storage expense reimbursements. If you
move between foreign countries, any moving
You do not include in your income the value of
are reimbursed for storage expenses, the reim-
expense reimbursement that you must include
meals and lodging provided to you and your
bursement is for services you perform during the
in income will be considered earned in the year
family by your employer at no charge if the
period of time for which the storage expenses
of the move if you qualify for the foreign earned
following conditions are met.
are incurred.
income exclusion for a period that includes at
least 120 days in the year of the move.
1. The meals are furnished:
Move to U.S. If you move to the United
U.S. Government Employees
a. On the business premises of your em-
States, the moving expense reimbursement that
ployer, and
you must include in income is generally consid-
For purposes of the foreign earned income ex-
ered to be U.S. source income.
clusion, the foreign housing exclusion, and the
b. For the convenience of your employer.
However, if under either an agreement be-
foreign housing deduction, foreign earned in-
2. The lodging is furnished:
tween you and your employer or a statement of
come does not include any amounts paid by the
Page 18
Chapter 4 Foreign Earned Income and Housing: Exclusion – Deduction
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