Form 2555: Foreign Earned Income

Form 2555 is for use by US citizens and resident aliens. Eligible taxpayers can calculate their foreign-earned income exclusion and their housing exclusion or deduction. Taxpayers can't exclude or deduct more than their foreign-earned income for the year.

To be eligible to use Form 2555, a taxpayer must:

  • Meet the tax home test, and

  • Meet either the bona fide residence test or the physical presence test

A tax home is a taxpayer's primary place of business or employment. The tax home must be in a foreign country throughout the period of residence or physical presence.

Bona fide residence means that a US citizen stays in a foreign country with the intent to make that country their home. To use Form 2555, the taxpayer must be a bona fide resident continuously for the entire tax year. The period of physical presence is 330 days when the taxpayer is present in a foreign country.

Form 2555 is due with Form 1040 or 1040-SR. If the taxpayer lives in a foreign country on the due date, the IRS grants a two-month extension. A statement attached to the return should explain why the taxpayer qualifies for this extension.

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