Glossary · US Tax
FEIE
The Foreign Earned Income Exclusion lets qualifying Americans abroad exclude a capped amount of foreign earned income from US tax. It is claimed on Form 2555 and requires meeting either the bona fide residence or physical presence test.
Foreign Earned Income Exclusion (Form 2555)
In more detail
The FEIE allows US citizens and residents living abroad to exclude foreign earned income (wages and self-employment income, not investment income) up to an annually-adjusted cap. You qualify by meeting either the bona fide residence test or the physical presence test (330 full days abroad in a 12-month period). The FEIE often competes with the Foreign Tax Credit; in a high-tax country like the UK, the Foreign Tax Credit is frequently the better choice, and the two interact in ways that need modelling.
Does FEIE apply to your situation?
Cross-border tax turns on the detail of your circumstances. Book a free consultation and we'll tell you exactly where you stand.