Foreign Earned Income Exclusion Explained: Who Qualifies and the 330-Day Test
In this guide
Quick answer: The foreign earned income exclusion lets certain US citizens and resident aliens living abroad leave part of their foreign earnings out of US taxable income. To qualify you need foreign earned income, a tax home in a foreign country, and to pass one of the tests: bona fide residence, treaty-country resident alien status plus bona fide residence, or being physically present abroad for at least 330 full days in any 12 consecutive months. You claim it using Form 2555.
Moving abroad does not end US tax duties for US citizens and resident aliens. That surprises many people. The foreign earned income exclusion is one of the main tools that eases the burden, and the 330-day count is where most people get tangled up. Here is what the IRS page says, plain and simple.
Who qualifies for the foreign earned income exclusion?
The IRS says you must have foreign earned income, your tax home must be in a foreign country, and you must meet one of these tests:
- Bona fide residence test: you are a US citizen who is a bona fide resident of one or more foreign countries for an uninterrupted period that includes an entire tax year.
- Treaty-country resident alien: you are a US resident alien who is a citizen or national of a country with an income tax treaty with the US, and you meet the bona fide residence requirement.
- Physical presence test: you are a US citizen or resident alien physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
How does the 330-day test work?
The 330 days are “full days” in a foreign country over a 12-month period you choose. That leaves room for up to 35 days in the US or in transit over that 12-month window (365 minus 330). The IRS page we reviewed gives only the 330-day threshold and links elsewhere for the rest, so check its detailed pages for how partial days and travel are counted.
How much can you exclude?
The amount is adjusted yearly for inflation. The IRS page we reviewed lists $120,000 as the latest figure it shows, which was for 2023, and does not list later years. We cannot confirm the current-year amount from that page, so check the IRS for this year’s figure before you file.
Which form do you use?
The IRS lists Form 2555, Foreign Earned Income, as the related form.
Does the exclusion cancel your filing duty?
No. For deciding whether you must file, the IRS says you must count as gross income any income that you exclude as foreign earned income. US citizens and residents living abroad generally must still file income, estate and gift tax returns, as they would at home. The IRS filing-requirements page says the threshold depends on your income, filing status and age.
Other reporting that may apply
Excluding income does not remove other reporting duties on foreign accounts. See FBAR filing requirements and Form 8938 and FATCA thresholds.
Common mistakes
- Thinking you do not need to file because you earn abroad.
- Counting calendar-year days instead of any 12 consecutive months for the 330-day test.
- Using an old year’s exclusion amount.
- Forgetting FBAR and Form 8938.
Frequently asked questions
Can a green card holder use the exclusion?
The IRS says a US resident alien may qualify through the physical presence test, or through the treaty-country route with bona fide residence.
Is the exclusion automatic?
The IRS lists Form 2555 as the related form, so you claim it on your return.
Does this help someone who is not a US person?
No. It is for US citizens and resident aliens. For others, see nonresident alien tax.
Key takeaways
- You need foreign earned income, a foreign tax home and to pass a qualifying test.
- The physical presence test needs at least 330 full days abroad in any 12 consecutive months.
- Check the IRS for the current-year exclusion amount.
- You may still need to file, and to report foreign accounts.
Related guides
- FBAR filing requirements
- Form 8938 and FATCA thresholds
- The substantial presence test
- US tax treaty benefits
This page is general information, not tax or legal advice. Confirm your position with the IRS or a qualified adviser. Last updated: October 2026.
Sources
- IRS: Foreign Earned Income Exclusion
- IRS: U.S. Citizens and Resident Aliens Abroad: Filing Requirements
- IRS: Summary of FATCA Reporting for U.S. Taxpayers