United States Foreign Earned Income Exclusion (FEIE)

Q: Does qualifying mean I'm no longer a US taxpayer?

No. A US citizen stays taxable on worldwide income no matter where they live, and this doesn't change that. It only takes foreign earned income out of the amount you're taxed on, up to a cap, and you still file a US return every year.

Q: How is a "full day" counted for the physical presence test?

A full day is 24 consecutive hours from midnight to midnight spent entirely in a foreign country. Days you travel between the US and abroad generally don't count, and time over international waters isn't time in a foreign country either.

Q: Can I use the 330-day test if I moved abroad partway through the year?

Yes. The twelve-month window doesn't have to match the calendar year — you can use any twelve consecutive months that include part of the tax year, choosing the window that gives the largest exclusion. Where your qualifying period covers only part of the year, the cap is prorated to the qualifying days.

Q: Do I still have to file a US return if the exclusion covers all my income?

Yes. The exclusion is claimed on Form 2555 with your return, so it only applies if you file one. A late election can also be denied once the IRS has already discovered that you didn't file.

Q: Does the exclusion cover self-employment tax?

No. Excluded income still counts for self-employment tax, so a self-employed American abroad can owe US tax on income that's fully excluded for income-tax purposes. A totalization agreement with the country you live in may remove that charge instead.

Q: Should I take the exclusion or the foreign tax credit?

It largely depends on local tax rates. In a high-tax country the credit often covers the whole US bill on its own, while in a low-tax or no-tax country the exclusion usually does more. The two can't apply to the same income, and switching away from the exclusion generally locks you out of it for five years.

Verified in August 2026

Overview

Key parameters
Threshold	330 days abroad
Period / Window	Rolling 12 months
Counting	Whole days abroad
Alternative	Foreign tax home, bona fide residence test

Understanding the rule

Nothing works without a foreign tax home first. Your tax home is the general area of your main place of business or post of duty. You don't have a foreign one for any period in which your abode stays in the United States — abode meaning where your economic, family and personal ties actually sit. Work you expect to last a year or less is temporary and doesn't move your tax home; work expected to run longer is indefinite and does.

With a foreign tax home in place, you qualify through either of two routes, in any order:

Physical presence test — physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. It's a pure day count, and your intentions and ties are irrelevant to it.
Bona fide residence test — you're a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year. There's no day count here: it turns on your purpose for being there, your activities, and whether you paid tax to that country.

Meeting either route lets you exclude foreign earned income up to the annual cap. A separate foreign housing exclusion can cover qualifying housing costs on top of that.

The bona fide residence route is narrower in who can use it. It's open to US citizens, and to US residents who are citizens or nationals of a country with a US income tax treaty in force — the physical presence test has no such restriction. One thing rules the route out outright: telling that country's authorities you aren't a resident there, where they then don't tax you as one.

The exclusion isn't automatic — you have to claim it yourself, on Form 2555 filed with your return.

How to keep track

The threshold is 330 days abroad within any 12 consecutive months. That window doesn't have to start on your first day abroad — you can pick whichever one gives the largest exclusion.
Those have to be full days, and a full day is 24 consecutive hours running midnight to midnight spent entirely in a foreign country. The days you fly in and out generally don't count, which is why the real allowance is tighter than 365 minus 330 suggests.
The days don't have to be in the same country — time in a foreign country or countries all counts toward the same total.
Time on or over international waters while travelling between the US and a foreign country isn't time abroad, which quietly costs days on long crossings.
Days in the US count against you whatever the reason — holidays, family visits and short business trips are all treated the same.
The 330-day minimum can be waived if you had to leave a country because of war, civil unrest or similar adverse conditions, and the IRS publishes which countries and dates that covers.

Keep a day-by-day travel log with boarding passes and entry and exit stamps. Add evidence supporting a foreign tax home — a lease, a local employment contract, or foreign tax filings — since the bona fide residence route rests on exactly that kind of proof.

Edge cases

Excluded income still sets the rate on the rest. Income above the cap is taxed at the rates that would have applied if the excluded amount were still in your total, so the first dollar over isn't taxed at the bottom rate.
It only reaches earned income. Pensions, annuities, dividends, interest, capital gains, and pay as a US government employee all sit outside it.
A US abode blocks it however many days you spend abroad. Keeping your economic, family and personal life centred in the US means no foreign tax home, and both routes then fail regardless of your day count.
Revoking it locks you out for five years. Getting back in inside that window generally needs IRS approval, so dropping the exclusion in one lean year has a long tail.

If you get this rule wrong

Claiming the exclusion without meeting either test leaves you with the tax you avoided plus an accuracy-related penalty of 20% of the underpayment, or 75% where the Internal Revenue Service (IRS) treats the position as fraud. Filing late matters too: the election is generally valid only on a return filed within a year of the due date, or a later one filed before the IRS notices. Professional tax advice is strongly recommended in situations like this.

Examples

A settled year abroad with room to spare

You move to Lisbon in January on an open-ended contract, work there all year, and make two trips home totalling 20 days in the US. Even after discounting the four travel days, you're well past 330 full days abroad, so the physical presence test qualifies you.

Trips home that eat the whole allowance

You work in Singapore but come back to the US for 25 days of client meetings and a two-week holiday — 39 days in all. A 330-day threshold leaves roughly 35 days of slack in a year, so you miss it, and each travel day counts against you on top.

A perfect day count with your life still in the US

You spend the entire year in Mexico and never set foot in the US, but your home, family and finances stay in Chicago and your employer treats the posting as a nine-month assignment. Your day count is flawless, yet your abode remains in the US, so you have no foreign tax home and neither route can help.

Official sources

FAQ

Does qualifying mean I'm no longer a US taxpayer?

How is a "full day" counted for the physical presence test?

Can I use the 330-day test if I moved abroad partway through the year?

Do I still have to file a US return if the exclusion covers all my income?

Does the exclusion cover self-employment tax?

Should I take the exclusion or the foreign tax credit?

For informational purposes only — this page does not provide legal, tax, immigration, residency, financial or any other advice. All information on this website is general in nature and should not be relied upon as professional or legal guidance. You are solely responsible for verifying information with official sources and consulting with qualified professional regarding your specific circumstances.