Professional Documents
Culture Documents
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
an entire tax year (January 1 – December the time requirements are met. See Pub.
Choosing the Exclusion 31), or 54 for details on how to make this choice.
To choose the foreign earned income • A U.S. resident alien who is a citizen or
exclusion, complete the appropriate parts national of a country with which the Line 3
of Form 2555-EZ and file it with your United States has an income tax treaty in
Form 1040 or Form 1040X, Amended effect and who is a bona fide resident of a Tax Home Test
U.S. Individual Income Tax Return. Your foreign country, or countries, for an
initial choice to claim the exclusion must To meet this test, your tax home must be
uninterrupted period that includes an in a foreign country, or countries (see
usually be made on a timely filed return entire tax year (January 1 – December
(including extensions) or on a return Foreign country on page 1), throughout
31). See Pub. 901, U.S. Tax Treaties, for your period of bona fide residence or
amending a timely filed return. However, a list of countries with which the United
there are exceptions. See Pub. 54 for physical presence, whichever applies. For
States has an income tax treaty in effect. this purpose, your period of physical
more information.
No specific rule determines if you are a presence is the 330 full days during which
Once you choose to claim the bona fide resident of a foreign country you were present in a foreign country, not
exclusion, that choice remains in effect for because the determination involves your the 12 consecutive months during which
that year and all future years unless it is intention about the length and nature of those days occurred.
revoked. To revoke your choice, you must your stay. Evidence of your intention may
attach a statement to your return for the Your tax home is your regular or
be your words and acts. If these conflict, principal place of business, employment,
first year you do not wish to claim the your acts carry more weight than your
exclusion. If you revoke your choice, you or post of duty, regardless of where you
words. Generally, if you go to a foreign maintain your family residence. If you do
cannot claim the exclusion for your next 5 country for a definite, temporary purpose
tax years without the approval of the not have a regular or principal place of
and return to the United States after you business because of the nature of your
Internal Revenue Service. See Pub. 54 accomplish it, you are not a bona fide
for details. trade or business, your tax home is your
resident of the foreign country. If regular place of abode (the place where
Figuring tax on income not excluded. accomplishing the purpose requires an you regularly live).
If you claim the foreign earned income extended, indefinite stay, and you make
exclusion, you must figure the tax on your your home in the foreign country, you You are not considered to have a tax
nonexcluded income using the tax rates may be a bona fide resident. See Pub. 54 home in a foreign country for any period
that would have applied had you not for more information and examples. during which your abode is in the United
claimed the exclusion. See the States. However, if you are temporarily
If you submitted a statement of present in the United States, or you
Instructions for Form 1040 and complete nonresidence to the authorities of a
the Foreign Earned Income Tax maintain a dwelling in the United States
foreign country in which you earned (whether or not that dwelling is used by
Worksheet to figure the amount of tax to income and the authorities hold that you
enter on Form 1040, line 44. When your spouse and dependents), it does not
are not subject to their income tax laws by necessarily mean that your abode is in
figuring your alternative minimum tax on reason of nonresidency in the foreign
Form 6251, you must use the Foreign the United States during that time.
country, you are not considered a bona
Earned Income Tax Worksheet in the fide resident of that country. Example. You are employed on an
instructions for Form 6251. offshore oil rig in the territorial waters of a
If you submitted such a statement and foreign country and work a 28-day on/
Earned income credit. You cannot take the authorities have not made an adverse
the earned income credit if you claim the 28-day off schedule. You return to your
determination of your nonresident status, family residence in the United States
exclusion. you are not considered a bona fide during your off periods. You are
Foreign tax credit or deduction. You resident of that country. considered to have an abode in the
cannot claim a credit or deduction for Line 1b. If you answered “Yes” on line United States and do not meet the tax
foreign income taxes paid on income you 1a, enter the dates your bona fide home test. You cannot claim the foreign
exclude. If all of your foreign earned residence began and ended. If you are earned income exclusion.
income is excluded, you cannot claim a still a bona fide resident, enter
credit or deduction for the foreign taxes
paid on that income. If only part of your
“Continues” in the space for the date your Line 12
bona fide residence ended. Complete columns (a) through (d) if you
income is excluded, you cannot claim a
credit or deduction for the foreign taxes were present in the United States or any
allocable to the excluded income. For Lines 2a and 2b of its possessions in 2007. Do not include
details on how to figure the amount time spent in the United States or its
allocable to the excluded income, see Physical Presence Test possessions before your period of bona
Pub. 514, Foreign Tax Credit for To meet this test, you must be a U.S. fide residence or physical presence,
Individuals. citizen or resident alien who is physically whichever applies, began or after it
present in a foreign country, or countries, ended.
IRA deduction. If you claim the for at least 330 full days during any period
exclusion, special rules apply in figuring Column (d). Enter, in U.S. dollars, the
of 12 months in a row. A full day means amount of income earned in the United
the amount of your IRA deduction. For the 24-hour period that starts at midnight.
details, see Pub. 590, Individual States on business (such as meetings or
Retirement Arrangements (IRAs). To figure the minimum of 330 full days’ conventions). Attach a statement showing
presence, add all separate periods you how you determined the amount. Do not
were present in a foreign country during include this income on line 17. Even if you
the 12-month period in which those days live and work in a foreign country, any
Specific Instructions occurred. The 330 full days can be income earned during the time spent in
interrupted by periods when you are the United States on business is
Lines 1a and 1b traveling over international waters or are considered U.S. source income and
otherwise not in a foreign country. See cannot be excluded.
Bona Fide Residence Test Pub. 54 for more information and
To meet this test, you must be one of the examples. Line 14
following: Note. A nonresident alien who, with a Enter the number of days in your
• A U.S. citizen who is a bona fide U.S. citizen or U.S. resident alien spouse, qualifying period that fall within 2007.
resident of a foreign country, or countries, chooses to be taxed as a resident of the Your qualifying period is the period during
for an uninterrupted period that includes United States can qualify under this test if which you meet the tax home test and
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Page 3 of 3 Instructions for Form 2555-EZ 9:13 - 7-SEP-2007
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
either the bona fide residence test or the • Noncash income (such as a home or that is definitely related to the 2006
physical presence test. car) if reported as income on Form 1040, foreign earned income you are excluding
Example. You establish a tax home and line 7. under this rule, you may have to amend
bona fide residence in a foreign country • Allowances or reimbursements if your 2006 income tax return to adjust the
on August 14, 2007. You maintain the tax reported as income on Form 1040, line 7. amount claimed. To do this, file Form
home and residence until January 31, Foreign earned income does not 1040X.
2009. The number of days in your include: Paperwork Reduction Act Notice. We
qualifying period that fall within 2007 is • Amounts from line 12, column (d), ask for the information on this form to
140 (August 14 through December 31, • Amounts paid to you by the U.S. carry out the Internal Revenue laws of the
2007). Government or any of its agencies if you United States. You are required to give us
were an employee of the U.S. the information. We need it to ensure that
Line 17 Government or any of its agencies, you are complying with these laws and to
Enter the total foreign earned income you • Amounts that are actually a distribution allow us to figure and collect the right
earned and received in 2007. Report the of corporate earnings or profits rather amount of tax.
amount in U.S. dollars using the than a reasonable allowance as
compensation for your personal services, You are not required to provide the
exchange rates in effect when you
or information requested on a form that is
actually received the income. Be sure to
report on Form 1040 all income you • Amounts received after the end of the subject to the Paperwork Reduction Act
tax year following the tax year in which unless the form displays a valid OMB
received in 2007 regardless of when you
you performed the services. control number. Books or records relating
earned it. to a form or its instructions must be
Income is earned in the year you Income earned in prior year. Foreign
retained as long as their contents may
performed the services for which you earned income received in 2007 for
become material in the administration of
received the pay. But if you received your services you performed in 2006 can be
any Internal Revenue law. Generally, tax
last wage or salary payment for 2006 in excluded from your 2007 gross income if,
returns and return information are
2007 because of your employer’s payroll and to the extent, the income would have
confidential, as required by Internal
period, that income can be treated as been excludable if you had received it in
Revenue Code section 6103.
earned in 2007. If you cannot treat that 2006.
The average time and expenses
wage or salary payment as earned in If you are excluding income under this
required to complete and file this form will
2007, the rules explained later under rule, do not include this income on line
vary depending on individual
Income earned in prior year apply. See 17. Instead, attach a statement to Form
circumstances. For the estimated
Pub. 54 for more details. 2555-EZ showing how you figured the
averages, see the instructions for your
Foreign earned income. For purposes exclusion. Enter the amount that would
income tax return.
of this form, foreign earned income have been excludable in 2006 on Form
2555-EZ to the left of line 18. Next to the If you have suggestions for making this
means only the following types of income
amount enter “Exclusion of Income form simpler, we would be happy to hear
received for personal services you
Earned in 2006.” Include it in the total from you. See the instructions for your
performed in a foreign country during the
reported on line 18. income tax return.
period for which you meet the tax home
test and either the bona fide residence Note. If you claimed any deduction,
test or the physical presence test. credit, or exclusion on your 2006 return
• Wages, salaries, tips, and bonuses.
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