Instructions for Form 2555, Foreign Earned Income

• Legal Form Number: 2555
• Year: 2025
• Issuer: Treasury Department
• Section: Treasury Department

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2023

Instructions for Form 2555

Foreign Earned Income

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to Form

2555 and its instructions, such as legislation enacted after they

were published, go to IRS.gov/Form2555.

What's New

Exclusion amount. For 2023, the maximum exclusion amount

has increased to $120,000.

Reminder

Tax home for individuals serving in a combat zone. Certain

individuals serving in a combat zone in support of the U.S.

Armed Forces may nonetheless establish a tax home in the

foreign country of the combat zone. For more information, see

Tax home test under Who Qualifies, later.

General Instructions

Don't include on Form 1040 or 1040-SR, line 25a or 25b

(federal income tax withheld from Form(s) W-2 or 1099,

respectively), any taxes an employer withheld from your

pay that were paid to the foreign country's tax authority instead

of the U.S. Treasury.

Purpose of Form

If you qualify, you can use Form 2555 to figure your foreign

earned income exclusion and your housing exclusion or

deduction. You cannot exclude or deduct more than the amount

of your foreign earned income for the year.

General Information

If you are a U.S. citizen or a resident alien living in a foreign

country, you are subject to the same U.S. income tax laws that

apply to U.S. citizens and resident aliens living in the United

States.

Note. Specific rules apply to determine if you are a resident or

nonresident alien of the United States. See Pub. 519.

Foreign country. A foreign country is any territory under the

sovereignty of a government other than that of the United States.

The term “foreign country” includes the country's territorial

waters and airspace, but not international waters and the

airspace above them. It also includes the seabed and subsoil of

those submarine areas adjacent to the country's territorial waters

over which it has exclusive rights under international law to

explore and exploit the natural resources.

The term “foreign country” doesn't include U.S. territories. It

doesn't include the Antarctic region.

Who Qualifies

You qualify to exclude your foreign earned income from gross

income if both of the following apply.

•You meet the tax home test (discussed later).

•You meet either the bona fide residence test or the physical

presence test (discussed later).

CAUTION

!

Note. Income from working abroad as an employee of the U.S.

Government does not qualify for either of the exclusions or the

housing deduction. Don't file Form 2555.

Tax home test. To meet this test, your tax home must be in a

foreign country, or countries (see Foreign country, earlier),

throughout your period of bona fide residence or physical

presence, whichever applies. For this purpose, your period of

physical presence is the 330 full days during which you were

present in a foreign country, or countries, not the 12 consecutive

months during which those days occurred.

Note. If you did not live 330 full days in a foreign country, or

countries, during a 12-month period, you are not entitled to claim

the foreign earned income exclusion. The 330 qualifying days do

not have to be consecutive.

Your tax home is your regular or principal place of business,

employment, or post of duty, regardless of where you maintain

your family residence. If you don't have a regular or principal

place of business because of the nature of your trade or

business, your tax home is your regular place of abode (the

place where you regularly live).

You aren't considered to have a tax home in a foreign country

for any period during which your abode is in the United States,

unless you are serving in support of the U.S. Armed Forces in an

area designated as a combat zone. See Service in a combat

zone, later. Otherwise, if your abode is in the United States, you

will not meet the tax home test and cannot claim the foreign

earned income exclusion.

The location of your abode is based on where you maintain

your family, economic, and personal ties. Your abode is not

necessarily in the United States merely because you maintain a

dwelling in the United States, whether or not your spouse and

dependents use the dwelling. Your abode is not necessarily in

the United States while you are temporarily in the United States.

However, these factors can contribute to your having an abode in

the United States.

Example. You are employed on an offshore oil rig in the

territorial waters of a foreign country and work a 28-day on/

28-day off schedule. You return to your family residence in the

United States during your off periods. You are considered to

have an abode in the United States and don't meet the tax home

test. You can't claim either of the exclusions or the housing

deduction.

Service in a combat zone. Citizens or residents of the

United States serving in an area designated by the President of

the United States by Executive order as a combat zone for

purposes of section 112 in support of the U.S. Armed Forces can

qualify as having a tax home in a foreign country, even if they

have an abode within the United States. For a list of

IRS-recognized combat zones, go to IRS.gov/Newsroom/

Combat-Zones.

Travel to Cuba

Generally, if you were in Cuba in violation of U.S. travel

restrictions, the following rules apply.

•Any time spent in Cuba can't be counted in determining if you

qualify under the bona fide residence or physical presence test.

•Any income earned in Cuba isn't considered foreign earned

income.

Oct 16, 2023Cat. No. 11901A