{ "_meta": { "reviewed": "2026-09-16", "taxYear": 2026 }, "_comment": "US tax residency and foreign earned income exclusion rules (cobaltprosper#73 scope B). Collected one agent per topic against docs/datasets/expat-residency-contract.md from IRS primary sources only, then verified by a second pass. Amounts are inflation-adjusted every year and are set by a Revenue Procedure, not by Publication 54, which lags: every amount carries the document that sets it and the tax year it applies to.", "collectedAt": "2026-09-16", "taxYear": 2026, "topicCount": 7, "topics": { "feie": { "taxYear": 2026, "amounts": [ { "key": "exclusionLimit", "value": 132900, "label": "Maximum foreign earned income exclusion", "taxYear": 2026, "setBy": "Rev. Proc. 2025-32 section 4.39, under IRC 911(b)(2)(D)(i)", "source": "https://www.irs.gov/pub/irs-drop/rp-25-32.pdf" }, { "key": "housingBaseAmount", "value": 21264, "label": "Base housing amount, the housing cost that is not excludable, for a full qualifying year", "taxYear": 2026, "setBy": "Notice 2026-25 section 2, 16 percent of $132,900 under IRC 911(c)(1)(B)", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "key": "housingExpenseLimitGeneral", "value": 39870, "label": "General limit on housing expenses that may be counted, for a full qualifying year, before any location specific adjustment", "taxYear": 2026, "setBy": "Notice 2026-25 section 2, 30 percent of $132,900 under IRC 911(c)(2)(A)", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" } ], "rules": [ { "key": "whoCanClaim", "statement": "Publication 54 lists five things that all have to be true at the same time: your tax home is in a foreign country, you live or are present in a foreign country, you have foreign earned income from performing personal services there, you meet either the bona fide residence test or the physical presence test, and you make a valid election by attaching Form 2555 to your return. The tests themselves are open only to US citizens and US resident aliens.", "number": null, "unit": null, "article": "IRC 911(d)(1); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements items 1 to 5", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "taxHomeAbroad", "statement": "Your tax home is your principal place of business, employment, or post of duty, regardless of where you keep your family home. It has to be in a foreign country for the period you are claiming. You are not treated as having a foreign tax home for any period your abode is in the United States, unless you are serving in a designated combat zone in support of the Armed Forces.", "number": null, "unit": null, "article": "IRC 911(d)(3); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 1", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "bonaFideResidenceTest", "statement": "You are a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year. The statute opens this test to US citizens. Publication 54 adds that a US resident alien may also use it if they are a citizen or national of a country that has an income tax treaty in effect with the United States. Living abroad for a year does not by itself make you a bona fide resident.", "number": 1, "unit": "years", "article": "IRC 911(d)(1)(A) for citizens; the resident alien treaty route is stated in Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 4a", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "physicalPresenceDays", "statement": "You are physically present in a foreign country or countries for 330 full days during any period of 12 consecutive months. The 330 days do not have to be consecutive, and the test does not care about your intentions or the kind of residence you set up.", "number": 330, "unit": "days", "article": "IRC 911(d)(1)(B); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 4b", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "earnedIncomeOnly", "statement": "Only income you earned by performing personal services abroad counts: wages, salaries, professional fees, self-employment income, and noncash pay or allowances. Pension and annuity income, including social security benefits and railroad retirement benefits treated as social security, does not count, and neither does interest, ordinary dividends, capital gains, or alimony.", "number": null, "unit": null, "article": "IRC 911(b)(1)(B)(i); Instructions for Form 2555 (2025), Part IV, Foreign Earned Income", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "usGovernmentPayExcluded", "statement": "Pay from the US Government or one of its agencies, received as an employee of that agency, is not foreign earned income and cannot be excluded.", "number": null, "unit": null, "article": "IRC 911(b)(1)(B)(ii); Instructions for Form 2555 (2025), Part IV", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "election", "statement": "You claim the exclusion by attaching Form 2555 to your income tax return or amended return. The choice then stays in effect for that year and every later year until you revoke it, which means you have to make the same choice again each year. Not making it in a later year counts as a revocation for that year.", "number": null, "unit": null, "article": "IRC 911(a) and 911(e)(1); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 5 and Effect of Choosing the Exclusions and Deduction", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "proration", "statement": "If you qualified for only part of the tax year, the maximum exclusion is prorated: multiply the year's maximum by your qualifying days in the year, then divide by 365, or 366 in a leap year. The IRS example for 2025 is 140 qualifying days giving $49,863, which is 140/365 of $130,000.", "number": 365, "unit": "days", "article": "IRC 911(b)(2)(A); IRS, Figuring the foreign earned income exclusion, Part year exclusion", "source": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion" }, { "key": "exclusionLimitedByIncome", "statement": "The exclusion is capped at the smaller of the year's maximum amount or your foreign earned income for the year minus any foreign housing exclusion you claim. If you claim the housing exclusion you have to figure that first. The exclusion and the housing deduction together can never exceed your foreign earned income for the year.", "number": null, "unit": null, "article": "IRC 911(d)(7); Pub. 54 (Rev. Dec. 2025), Limit on Excludable Amount", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "housingBasePercent", "statement": "The base housing amount is 16 percent of the year's maximum exclusion, computed on a daily basis and multiplied by your qualifying days in the tax year. Housing costs below that base are never excludable.", "number": 16, "unit": "percent", "article": "IRC 911(c)(1)(B); Notice 2026-25 section 2", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "key": "housingCapPercent", "statement": "The housing expenses you may count are generally capped at 30 percent of the year's maximum exclusion, again computed daily and multiplied by qualifying days. For 2026 that general cap is $39,870.", "number": 30, "unit": "percent", "article": "IRC 911(c)(2)(A); Notice 2026-25 section 2", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "key": "housingAmountArithmetic", "statement": "The housing amount is your qualifying housing expenses for the year minus the base housing amount. With the 2026 general cap of $39,870 and the 2026 base of $21,264, the most a full year qualifier outside a listed high cost location can have as a housing amount is $18,606, and that is a ceiling rather than an entitlement because your actual expenses and your foreign earned income can both limit it further.", "number": null, "unit": null, "article": "IRC 911(c)(1); Notice 2026-25 section 2; Pub. 54 (Rev. Dec. 2025), Housing Amount", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "key": "cityLimitTable", "statement": "Higher housing expense limits for specific foreign locations are set annually by IRS notice. For 2026 the table is in Notice 2026-25 section 3, and that notice supersedes Notice 2025-16. Look up your own city there rather than assuming the general cap applies.", "number": null, "unit": null, "article": "IRC 911(c)(2)(B); Notice 2026-25 sections 3 and 5", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "key": "housingExclusionVersusDeduction", "statement": "The housing exclusion applies only to housing paid for with employer provided amounts. The housing deduction applies only to housing paid for out of self-employment earnings.", "number": null, "unit": null, "article": "IRC 911(a)(2) and 911(c)(4); Pub. 54 (Rev. Dec. 2025), Foreign Housing Exclusion and Deduction", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "foreignTaxCreditInteraction", "statement": "Once you elect the exclusion you cannot take a foreign tax credit or deduction for foreign taxes on the income you excluded. Publication 54 notes that you can still credit foreign taxes paid on the part of your foreign wages that was not excluded.", "number": null, "unit": null, "article": "IRC 911(d)(6); Pub. 54 (Rev. Dec. 2025), Foreign tax credit or deduction", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "selfEmploymentTax", "statement": "The exclusion reduces regular income tax only. It does not reduce self-employment tax, which still applies to net earnings from self-employment of at least $400 whether you live in the United States or abroad. Publication 54 works an example in which a consultant abroad with a $68,000 net profit pays self-employment tax on the whole $68,000 even though the profit qualifies for the exclusion.", "number": 400, "unit": "dollars", "article": "IRC 1401 and 1402; IRS, Foreign earned income exclusion, Self-employment income; Pub. 54 (Rev. Dec. 2025), chapter 3, Self-Employment Tax", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion" }, { "key": "revocationFiveYearRule", "statement": "You can revoke the election for any year. If you revoke it and then want the same exclusion again within 5 years, you have to apply for IRS approval by requesting a ruling from the IRS, following the procedure Publication 54 points to.", "number": 5, "unit": "years", "article": "IRC 911(e)(2); Pub. 54 (Rev. Dec. 2025), Effect of Revoking the Exclusions", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "marriedCouplesEachQualify", "statement": "If both spouses work abroad, each has a foreign tax home, and each meets either test, each can claim a full exclusion, for a total of twice the year's maximum. They do not have to meet the same test.", "number": null, "unit": null, "article": "IRC 911(a) applied per qualified individual; Pub. 54 (Rev. Dec. 2025), Limit on Excludable Amount", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "adverseConditionsWaiver", "statement": "The minimum time requirements for both tests can be waived if you had to leave a foreign country because of war, civil unrest, or similar adverse conditions there. The IRS publishes the list of countries and dates that qualify.", "number": null, "unit": null, "article": "IRC 911(d)(4); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 4c", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" } ], "forms": [ { "form": "2555", "purpose": "Figures the foreign earned income exclusion and the foreign housing exclusion or deduction, and is the attachment that makes the election.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "form": "1116", "purpose": "Claims the foreign tax credit, which may not be taken on income excluded under Form 2555.", "source": "https://www.irs.gov/forms-pubs/about-form-1116" }, { "form": "Schedule SE (Form 1040)", "purpose": "Figures self-employment tax, which the exclusion does not reduce.", "source": "https://www.irs.gov/forms-pubs/about-schedule-se-form-1040" } ], "gotchas": [ { "statement": "Do not look for the 2026 amount in Publication 54. The December 2025 revision became a continuous use document and removed the inflation adjusted amounts, including the foreign earned income exclusion, telling readers to go to the Revenue Procedure for the tax year instead. The 2025 Form 2555 and its instructions are still the current ones on IRS.gov and they print $130,000, the 2025 figure.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "The main IRS Foreign earned income exclusion landing page, last reviewed 12 June 2026, still lists maximum amounts only through 2023. Do not read a missing year as no change. The separate page Figuring the foreign earned income exclusion is the one carrying 2026.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion" }, { "statement": "The housing figure people quote, $39,870 for 2026, is a cap on countable expenses, not tax free housing. The first $21,264 of housing cost is the base amount and is not excludable, so outside the listed high cost locations the housing amount tops out at $18,606.", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" }, { "statement": "Excluded income still sets your tax rate on everything else. You figure tax on the income you did not exclude using the rates that would have applied if you had excluded nothing, through the Foreign Earned Income Tax Worksheet in the Form 1040 instructions.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "Taking a foreign tax credit or deduction, the additional child tax credit, or the earned income credit in a later year is itself treated as revoking the exclusion election for that year, and getting the exclusion back within 5 years then needs an IRS ruling.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "Electing the exclusion blocks the additional child tax credit and the earned income credit for the same year. Publication 54 states both restrictions.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "A self-employed person who excludes income still owes self-employment tax on the whole net profit, and must also give up the deductions definitely related to the excluded income, including the deductible part of self-employment tax, which Form 2555 collects on line 44.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "The 330 day physical presence test and the 183 day substantial presence test are different tests with different arithmetic. The 330 is full days abroad in any 12 consecutive months for an American claiming this exclusion. The 183 is a weighted three year total, alongside a 31 day current year minimum, that decides whether a foreign national is treated as a US resident.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "A foreign country for this purpose is any territory under the sovereignty of a government other than the United States. The Form 2555 instructions say it does not include US territories, the Antarctic region, or international waters and the airspace above them.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "Notice 2026-25 supersedes Notice 2025-16. For some locations the 2026 limit is higher than the 2025 one, and a qualified individual who had housing expenses in such a location during 2025 may use the 2026 figure for the 2025 tax year instead of the Notice 2025-16 figure.", "source": "https://www.irs.gov/pub/irs-drop/n-26-25.pdf" } ], "confidence": "P", "openQuestions": null, "note": "Publication 54 was converted to a continuous use document with the December 2025 revision and no longer prints any inflation adjusted amount, so there will be no Publication 54 figure for 2026 to check against. The publication tells readers to go to IRS.gov/InflationAdjustment and read the Revenue Procedure for the year. The 2025 Form 2555 and instructions are still the current ones on IRS.gov and carry $130,000. The IRS Foreign earned income exclusion landing page, last reviewed 12 June 2026, publishes maximum amounts only through 2023 and says nothing about the base housing amount or the location specific caps. The Foreign housing exclusion or deduction page explains the 16 percent base but never names the notice carrying the location table and never states the 30 percent general cap in dollars. Every 2026 figure here therefore comes from Rev. Proc. 2025-32 section 4.39 and Notice 2026-25 section 2, and is independently corroborated by the IRS page Figuring the foreign earned income exclusion, last reviewed 14 March 2026, which states $132,900 and $39,870 for 2026.", "corrections": [ { "field": "amounts[exclusionLimit].setBy", "was": "Rev. Proc. 2025-32 section 3.39, under IRC 911(b)(2)(D)(i)", "now": "Rev. Proc. 2025-32 section 4.39, under IRC 911(b)(2)(D)(i)", "evidence": "In Rev. Proc. 2025-32 the 2026 figures are in SECTION 4, 2026 ADJUSTED ITEMS, where .39 Foreign Earned Income Exclusion reads: for taxable years beginning in 2026, the foreign earned income exclusion amount under 911(b)(2)(D)(i) is $132,900. Section 5.02 confirms section 4 applies to taxable years beginning in 2026. Section 3 of the same document is titled 2025 ADJUSTED ITEMS AS MODIFIED, SUPERSEDED OR SUPPLEMENTED and contains only .01 and .02, both 2025 items. There is no section 3.39, and a reader following the old citation would land in the 2025 part of the document." }, { "field": "gotchas[0].statement", "was": "Publication 54 is behind. The December 2025 revision and the 2025 Form 2555 instructions both say $130,000, which is the 2025 figure.", "now": "Publication 54 no longer prints any exclusion amount at all; the 2025 Form 2555 and instructions are the ones still printing $130,000.", "evidence": "Publication 54 (Rev. 12-2025), What's New, Continuous-use revision: the publication was converted from an annual revision to a continuous use revision in tax year 2025, and the annual inflation adjusted amounts for items such as standard deduction, foreign earned income exclusion and IRA contribution limits have been removed throughout the publication, with instructions to go to IRS.gov/InflationAdjustment and read the Revenue Procedure. A search of the full text of p54.pdf for 130,000 and 132,900 returns no hits." }, { "field": "note", "was": "Publication 54 and the 2025 Form 2555 instructions both carry $130,000, the 2025 figure.", "now": "Publication 54 carries no amount; only the 2025 Form 2555 and instructions carry $130,000. Added that the 2026 figures are corroborated by the IRS page Figuring the foreign earned income exclusion.", "evidence": "Same Publication 54 Continuous-use revision paragraph. The IRS page Figuring the foreign earned income exclusion, last reviewed 14 March 2026, states that for tax year 2026 the maximum exclusion is $132,900 per person and that for 2026 the housing amount limitation is $39,870." }, { "field": "rules[whoCanClaim].statement", "was": "You must be a US citizen or a US resident alien, your tax home must be in a foreign country, and you must meet either the bona fide residence test or the physical presence test. All three have to be true at once.", "now": "Lists all five of Publication 54's requirements, adding that you must have foreign earned income from services performed abroad and must make a valid election on Form 2555.", "evidence": "Publication 54 (Rev. 12-2025), chapter 4, Requirements, numbers five items: 1 Tax home, 2 Foreign country, 3 Foreign earned income, 4 Bona fide residence and physical presence tests, 5 Valid election. The old wording said all three have to be true at once, which reads as if those three are enough." }, { "field": "rules[bonaFideResidenceTest].article", "was": "IRC 911(d)(1)(A); Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 4a", "now": "IRC 911(d)(1)(A) for citizens; the resident alien treaty route is stated in Pub. 54 (Rev. Dec. 2025), chapter 4, Requirements item 4a", "evidence": "IRC 911(d)(1)(A) opens the bona fide residence route to a citizen of the United States only. The extension to a US resident alien who is a citizen or national of a treaty country appears in Publication 54 and on the IRS landing page, not in that code subparagraph. The statement was right; the citation pointed at a subsection that does not carry half of it." }, { "field": "rules[revocationFiveYearRule].statement", "was": "you must request IRS approval through a private letter ruling", "now": "you have to apply for IRS approval by requesting a ruling from the IRS, following the procedure Publication 54 points to", "evidence": "Publication 54 (Rev. 12-2025), Effect of Revoking the Exclusions: if you revoked a choice and within 5 years again wish to choose the same exclusion, you must apply for IRS approval by requesting a ruling from the IRS, citing section 8.05(6).04(1) to (3) of Rev. Proc. 2024-1. The phrase private letter ruling is the practitioner term and is not the IRS wording here." }, { "field": "gotchas[5].statement", "was": "A family can be worse off excluding income than paying US tax on it and taking the credits.", "now": "Sentence removed; the gotcha now states only the restriction Publication 54 states.", "evidence": "House rule is explain and compute, never advise. Publication 54 states that the additional child tax credit and the earned income credit are unavailable in a year the election is in effect, but says nothing about which outcome leaves a family better off, and that comparison depends on facts we do not have." }, { "field": "gotchas[9].statement", "was": "That option can change a 2025 return that has already been filed.", "now": "Sentence replaced with the notice's own framing: for some locations the 2026 limit is higher, and a qualified individual with housing expenses in such a location during 2025 may use the 2026 figure for 2025.", "evidence": "Notice 2026-25 section 4 says that for some locations the limitation in section 3 may be higher than the Notice 2025-16 limitation, and a qualified individual incurring housing expenses in such a location during 2025 may apply the section 3 limitation in lieu of the Notice 2025-16 amount. It says nothing about amending a filed return." }, { "field": "gotchas[8].statement", "was": "A foreign country for this purpose does not include US territories such as Puerto Rico, Guam or the USVI, and does not include the Antarctic region or international waters.", "now": "Names no individual territories, and adds the positive definition of a foreign country from Publication 54.", "evidence": "The Instructions for Form 2555 (2025) say the term foreign country does not include US territories and does not include the Antarctic region, and that it includes the country's territorial waters and airspace but not international waters and the airspace above them. They do not name Puerto Rico, Guam or the USVI in that passage, so the naming was the collector's addition rather than a read figure." }, { "field": "rules[exclusionLimitedByIncome]", "was": "not collected", "now": "Added: the exclusion is the smaller of the year's maximum or foreign earned income minus any housing exclusion claimed, and exclusion plus housing deduction can never exceed foreign earned income.", "evidence": "Publication 54 (Rev. 12-2025), Limit on Excludable Amount: you cannot exclude more than the smaller of the maximum annual exclusion amount or your foreign earned income minus your foreign housing exclusion. IRC 911(d)(7): the sum of the amount excluded under subsection (a) and the amount deducted under subsection (c)(4)(A) shall not exceed the individual's foreign earned income for the year. Without this, a page could present $132,900 plus $18,606 as if both were always available." } ], "reviewNotes": [ { "question": "The 2026 Form 2555 and its instructions are not published yet, so the 2026 housing worksheet line references are not verified.", "resolution": "Confirmed and does not affect a published field. IRS.gov still serves the 2025 Form 2555 and the 2025 instructions at the stable URLs, and there is no 2026 prior-year file. This record publishes no worksheet line references and no location specific figures, so nothing here depends on the unpublished 2026 form.", "evidence": "https://www.irs.gov/pub/irs-pdf/f2555.pdf shows tax year 2025 on the form face; https://www.irs.gov/pub/irs-pdf/i2555.pdf is headed Instructions for Form 2555 (2025) and its What's New says the maximum exclusion for 2025 increased to $130,000. Requests for i2555--2026.pdf and f2555--2026.pdf under /pub/irs-prior/ both return 404." }, { "question": "The Publication 54 revision for 2026 is not out, so every 2026 figure rests on Rev. Proc. 2025-32 and Notice 2026-25 rather than on a Publication.", "resolution": "Settled, and the premise was wrong in a way that helps. There will be no 2026 Publication 54 amount to wait for. Publication 54 became a continuous use document with the December 2025 revision and deliberately removed the inflation adjusted amounts, directing readers to the Revenue Procedure. Resting the 2026 figures on the Revenue Procedure and the Notice is therefore the method the IRS itself prescribes, not a gap. The figures are also independently corroborated on an IRS web page reviewed in March 2026.", "evidence": "Publication 54 (Rev. 12-2025), What's New, Continuous-use revision paragraph. IRS, Figuring the foreign earned income exclusion, last reviewed 14 March 2026: for tax year 2026 the maximum exclusion is $132,900 per person, and for 2026 the housing amount limitation is $39,870." }, { "question": "Notice 2026-25 says a future 2027 notice is expected to let taxpayers apply 2027 location limits to 2026, so the 2026 location table may effectively be superseded later.", "resolution": "Settled and does not affect a published field. What section 4 describes is an option to use a higher later limit, not a replacement of the 2026 table, and section 6 makes Notice 2026-25 effective for taxable years beginning on or after 1 January 2026. This record publishes no location specific figure, only the general cap, which is fixed by statute at 30 percent of the exclusion and is not affected by the location table.", "evidence": "Notice 2026-25 section 4: the Treasury Department and the IRS anticipate that future annual notices will make a similar option available, for example that taxpayers will be permitted to apply the 2027 adjusted limitations to the 2026 taxable year. Section 6: this notice is effective for taxable years beginning on or after January 1, 2026." }, { "question": "Does the arithmetic claim that the housing ceiling outside listed cities is the cap minus the base hold up?", "resolution": "Yes as an upper bound, and the wording has been tightened to say so. $39,870 minus $21,264 is $18,606. It is a ceiling, not an entitlement: your actual housing expenses cap it from below, housing expenses may not exceed your total foreign earned income, and the housing deduction is limited to foreign earned income minus the exclusion with a one year carryover of any excess.", "evidence": "IRC 911(c)(1): the housing cost amount is housing expenses to the extent they do not exceed the paragraph (2) limit, over the 16 percent base. IRC 911(c)(4)(B) and (C) for the deduction limit and carryover. IRS, Foreign housing exclusion or deduction: foreign housing expenses may not exceed your total foreign earned income for the taxable year." }, { "question": "Does IRC 911(e)(2) actually say 5 years?", "resolution": "It says the same thing in different words, and the rule now tracks the IRS phrasing. The statute says a taxpayer who revokes may not make another election for any taxable year before the 6th taxable year after the year of the revocation, except with the consent of the Secretary. Publication 54 renders that as within 5 years, and the consent is obtained by requesting a ruling.", "evidence": "IRC 911(e)(2), quoted above. Publication 54 (Rev. 12-2025), Effect of Revoking the Exclusions." }, { "question": "Does the foreign tax credit interaction claim match its cited code section?", "resolution": "Yes, and the statement is narrower than the statute, which is the safe direction. IRC 911(d)(6) denies any deduction, exclusion or credit properly allocable to or chargeable against excluded amounts, including foreign tax credits. The statement covers only the foreign tax credit and deduction, which is what Publication 54 spells out, and the carve out for tax on income above the limit is Publication 54's own note.", "evidence": "IRC 911(d)(6), Denial of double benefits. Publication 54 (Rev. Dec. 2025), Foreign tax credit or deduction, including the note that a high wage earner can take the exclusion up to the limit and then credit foreign taxes paid on the portion of the wage that was not excluded." }, { "question": "Does the self-employment tax point hold, including the $400 figure?", "resolution": "Yes, on two IRS sources, and a worked IRS example has been added. The IRS Foreign earned income exclusion page states the excluded amount reduces regular income tax but not self-employment tax. Publication 54 states you must pay self-employment tax if net earnings from self-employment are at least $400 and that the rules are generally the same whether you live in the United States or abroad.", "evidence": "IRS, Foreign earned income exclusion, Self-employment income. Publication 54 (Rev. 12-2025), chapter 3: self-employment tax is due if net earnings from self-employment are at least $400, with the example of a consultant abroad whose foreign earned income is $95,000, business deductions $27,000 and net profit $68,000, who must pay self-employment tax on the $68,000 even though qualified for the exclusion." }, { "question": "Do the housing base and cap really equal 16 percent and 30 percent of the exclusion, and does the arithmetic check?", "resolution": "Yes, read directly in the notice and matched against the statute. $132,900 times 0.16 is $21,264 and times 0.30 is $39,870, both stated in the notice in exactly those terms.", "evidence": "Notice 2026-25 section 2: the base housing amount for 2026 is $21,264 ($132,900 x .16), and a qualified individual whose entire taxable year is within the applicable period is limited to maximum housing expenses of $39,870 ($132,900 x .30). IRC 911(c)(1)(B)(i) and 911(c)(2)(A)(i) set the 16 and 30 percent figures on a daily basis." }, { "question": "Is the proration example on the IRS page real, and is the arithmetic right?", "resolution": "Both check out. The IRS page carries the example verbatim and 140 divided by 365 times $130,000 is $49,863.", "evidence": "IRS, Figuring the foreign earned income exclusion, Part year exclusion: the number of days in your qualifying period that fall within your 2025 tax year is 140, and your maximum exclusion for 2025 is $49,863 (140/365 x $130,000)." }, { "question": "Did the collection take any figure from Publication 54 or the 2025 Form 2555?", "resolution": "No. Every published amount traces to Rev. Proc. 2025-32 section 4.39 or Notice 2026-25 section 2. The only place $130,000 appears is inside gotchas that exist to warn the reader that the form still prints it, and inside the IRS proration example, which is explicitly labelled as a 2025 example.", "evidence": "The three amounts carry setBy values naming only the Revenue Procedure and the Notice, and their source URLs are the two irs-drop PDFs." } ] }, "physical-presence": { "taxYear": 2026, "amounts": [ { "key": "exclusionLimit", "value": 132900, "label": "Maximum foreign earned income exclusion a full qualifying year can reach (the figure a part-year physical presence period is prorated against)", "taxYear": 2026, "setBy": "Rev. Proc. 2025-32 section 4.39, under IRC 911(b)(2)(D)(i)", "source": "https://www.irs.gov/pub/irs-drop/rp-25-32.pdf" } ], "rules": [ { "key": "physicalPresenceDays", "statement": "You meet the physical presence test if you are physically present in a foreign country or countries for at least 330 full days during a period of 12 consecutive months that includes some part of the tax year at issue.", "number": 330, "unit": "days", "article": "IRC 911(d)(1)(B); Treas. Reg. 1.911-2(a)(2)(ii)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "daysNeedNotBeConsecutive", "statement": "The 330 qualifying days do not have to be consecutive. You add up every separate period you were present in a foreign country inside the chosen 12 month window, and the run can be interrupted by time travelling over international waters or otherwise outside a foreign country.", "number": null, "unit": null, "article": "Form 2555 instructions, Part III, Physical Presence Test; Treas. Reg. 1.911-2(d)(2)", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "testIsMechanical", "statement": "The test is based only on how long you stay in a foreign country. It does not depend on the kind of residence you establish, your intentions about returning to the United States, or the nature and purpose of your stay. Form 2555 notes that US citizens and all resident aliens can use this test, while the bona fide residence test is open only to US citizens and to resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect.", "number": null, "unit": null, "article": "IRC 911(d)(1)(B); Form 2555, Part III note; Form 2555 instructions, Parts II and III", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "twelveMonthPeriodAnyStartDay", "statement": "A 12 month period can begin with any day of the month. It ends the day before the same calendar day 12 months later, and it must be made up of consecutive months. The Form 2555 instructions put it as a length: the period must include 365 days, or 366 in a leap year, part of which must fall in the tax year you are filing.", "number": 12, "unit": "months", "article": "Form 2555, line 16; Form 2555 instructions, line 16; Treas. Reg. 1.911-2(d)(1)", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "shiftPeriodToMaximizeExclusion", "statement": "You do not have to start the 12 month period with your first full day abroad or end it with the day you leave, and 12 month periods may overlap one another. You can choose whichever 12 month period gives you the greatest exclusion, which matters most in a year you qualify for only part of.", "number": null, "unit": null, "article": "Form 2555, line 16; Treas. Reg. 1.911-2(d)(1)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "fullDayDefinition", "statement": "A full day is a period of 24 consecutive hours beginning and ending at midnight, and you must spend the whole of it in a foreign country or countries for it to count. The one softening is the change of location rule: if you have been present in a foreign country and then travel over areas not within any foreign country for less than 24 hours, you are not treated as being outside a foreign country during that travel.", "number": null, "unit": null, "article": "Form 2555 instructions, Part III; Treas. Reg. 1.911-2(d)(2)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "internationalWatersOrAirspace", "statement": "Time spent on or over international waters when you leave the United States for a foreign country, or return from one, does not count as time in a foreign country. In the IRS example, you fly out of the United States on June 10 and land in France at 9:00 a.m. on June 11, so your first full day in France is June 12.", "number": null, "unit": null, "article": "Treas. Reg. 1.911-2(d)(2) and (h); Form 2555 instructions, Foreign Country", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "passingOverAForeignCountry", "statement": "If you pass over a foreign country before midnight of the day you leave the United States, the first day you can count toward the 330 is still the day after the day you left. In the IRS example, you leave the United States at 9:30 a.m. on June 10, pass over part of France at 11:00 p.m. that night and land in Spain at 12:30 a.m. on June 11, and June 11 is your first full day in a foreign country.", "number": null, "unit": null, "article": "Treas. Reg. 1.911-2(d)(2)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "travelBetweenForeignCountries", "statement": "You can move from place to place within a foreign country, or from one foreign country to another, without losing full days, as long as no part of the trip that is outside every foreign country takes 24 hours or more. The IRS examples: London to Stockholm overnight takes less than 24 hours and loses nothing, while a ship leaving Norway at 10 p.m. on July 6 and docking in Portugal at 6 a.m. on July 8 takes more than 24 hours outside any foreign country, so July 6, 7 and 8 are all lost.", "number": null, "unit": null, "article": "Form 2555, line 18; Treas. Reg. 1.911-2(d)(2)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "inUnitedStatesWhileInTransit", "statement": "If you are in transit between two points outside the United States and are physically present in the United States for less than 24 hours, you are not treated as present in the United States during the transit. You are treated as travelling over areas not within any foreign country, and under the change of location rule that travel costs you full days only if the stretch outside every foreign country takes 24 hours or more. Form 2555 says the same thing from the other side at line 18: you leave off the travel table any travel between foreign countries that did not involve being on or over international waters, or in or over the United States, for 24 hours or more.", "number": null, "unit": null, "article": "Treas. Reg. 1.911-2(d)(2); Form 2555, line 18", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "key": "taxHomeAbroadRequired", "statement": "Counting 330 days is only half the test. Your tax home, meaning the general area of your main place of business, employment or post of duty, must be in a foreign country throughout the period of physical presence. Section 911(d)(1) applies the tax home condition to both qualifying tests.", "number": null, "unit": null, "article": "IRC 911(d)(1); IRC 911(d)(3); Treas. Reg. 1.911-2(a)(1)(ii)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "abodeInUnitedStates", "statement": "You do not have a tax home in a foreign country for any period in which your abode is in the United States, unless you are serving in support of the Armed Forces in a designated combat zone. Abode turns on where your family, economic and personal ties are, which is how a rotational worker who returns to a US family home fails the test even with the days.", "number": null, "unit": null, "article": "IRC 911(d)(3); Treas. Reg. 1.911-2(b)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "foreignCountryDefinition", "statement": "A foreign country is territory under the sovereignty of a government other than the United States, including its airspace and, for this exclusion, the territorial waters within 12 nautical miles. It does not include international waters or airspace, US territories such as Puerto Rico, Guam, the Northern Mariana Islands, the US Virgin Islands or American Samoa, the Antarctic region, or offshore installations outside any country's territorial waters.", "number": null, "unit": null, "article": "Treas. Reg. 1.911-2(g) and (h); Form 2555 instructions, Foreign Country", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "waiverWarOrCivilUnrest", "statement": "If your tax home was in a foreign country and you had to leave because of war, civil unrest or similar adverse conditions, the minimum time requirement can be waived. You must show you could reasonably have expected to meet it but for those conditions, and you must have been a bona fide resident of, or physically present in, that country on or before the date the waiver begins. Attach a statement to the return and enter Claiming Waiver in the top margin of page 1 of Form 2555.", "number": null, "unit": null, "article": "IRC 911(d)(4); Treas. Reg. 1.911-2(f); Form 2555 instructions, Waiver of Time Requirements", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "key": "waiverCountryListDocument", "statement": "Early each year the IRS publishes a Revenue Procedure in the Internal Revenue Bulletin naming the only countries whose time requirement is waived for the prior year, with the departure date each one runs from. Rev. Proc. 2026-16 is the list for tax year 2025 and nothing later: Haiti and Ukraine from January 1, 2025, the Democratic Republic of the Congo from January 28, 2025, South Sudan from March 7, 2025, Iraq from June 11, 2025, Lebanon from June 22, 2025, and Mali from October 30, 2025.", "number": null, "unit": null, "article": "Rev. Proc. 2026-16, section 3.01, under IRC 911(d)(4)", "source": "https://www.irs.gov/pub/irs-drop/rp-26-16.pdf" }, { "key": "waiverDaysStillCountActualPresenceOnly", "statement": "The waiver excuses the 330 day minimum, not the arithmetic of the exclusion. In figuring how much you can exclude, your qualifying days include only the days you were actually resident or present in the foreign country.", "number": null, "unit": null, "article": "IRC 911(d)(4); Treas. Reg. 1.911-2(f); Form 2555 instructions, Waiver of Time Requirements", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "key": "partYearProration", "statement": "If your qualifying period covers only part of the tax year, the maximum exclusion is prorated: multiply the year's maximum by the number of qualifying days that fall in the tax year, then divide by 365, or 366 in a leap year. Form 2555 does this at lines 37 through 40, entering the ratio at line 39 as a decimal rounded to at least three places.", "number": 365, "unit": "days", "article": "IRC 911(b)(2)(A); Form 2555, lines 37 to 40", "source": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion" }, { "key": "daysInViolationOfUSLaw", "statement": "Days spent in a foreign country in violation of US law do not count toward the 330, and income earned from sources in that country for services performed during the violation is not foreign earned income. Cuba is currently the only country to which US travel restrictions apply, with an exception for civilians performing services at the US Naval Base at Guantanamo Bay.", "number": null, "unit": null, "article": "IRC 911(d)(8); Notice 2006-84; Form 2555 instructions, Travel restrictions", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "key": "electionRequiresFiledReturn", "statement": "Passing the test earns nothing by itself. The exclusion applies only if you report the income on a filed US return and make a valid election by attaching Form 2555, and the election then stays in effect for later years unless you revoke it.", "number": null, "unit": null, "article": "IRC 911(a) and 911(e); Form 2555", "source": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion" } ], "forms": [ { "form": "2555", "purpose": "Foreign Earned Income. Part III is where the physical presence test is claimed: line 16 sets the 12 month period, line 18 lists the travel that can break it, and lines 37 to 40 prorate the maximum exclusion for a part year qualifying period.", "source": "https://www.irs.gov/pub/irs-pdf/f2555.pdf" } ], "gotchas": [ { "statement": "The 330 days of this test and the 183 days of the substantial presence test are different tests pointing in opposite directions. This one counts full days you spend outside the United States across any 12 consecutive months, to let a US taxpayer exclude foreign earnings. The substantial presence test counts days you spend inside the United States, at least 31 in the current year and at least 183 over three years weighted at all of the current year, one third of the first prior year and one sixth of the second, and decides whether a non-citizen is taxed as a US resident at all.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "330 out of 365 leaves only 35 days, and travel days come out of that budget before any holiday does. Time on or over international waters when you leave the United States for a foreign country, or return from one, does not count as time in a foreign country: in the IRS example you fly out on June 10, land in France at 9:00 a.m. on June 11, and your first countable day is June 12. A round trip home therefore costs the day you leave the foreign country, every day you are in the United States, and the day you fly back in.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "statement": "The 12 month period is not the calendar year. Readers test January to December, come up short, and conclude they do not qualify, when a window starting on a different day would hold 330 full days. You may pick whichever 12 consecutive months give the largest exclusion, and overlapping windows are allowed across years.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "statement": "Qualifying does not mean the whole exclusion. If the qualifying period covers only part of the tax year, the maximum is cut to the share of the year it covers. The IRS worked example: a qualifying period that begins on August 14 covers 140 days of that tax year, so the maximum for that year is 140/365 of the annual figure.", "source": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion" }, { "statement": "Counting the days is not enough on its own. Your tax home must be in a foreign country for the same period, and your abode must not be in the United States. An offshore worker on a 28 day on, 28 day off rotation who returns to a US family home has a US abode and fails, whatever the day count says.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "No reason excuses falling short of 330 days. The IRS says the test is failed regardless of the cause, including illness, family problems, a vacation, or an employer's orders. The only relief is the war or civil unrest waiver, which covers just the countries and dates named in that year's Revenue Procedure.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "statement": "A stop in the United States of under 24 hours while in transit between two foreign points does not cost you the day. You are not treated as present in the United States during the transit, only as travelling over areas not within any foreign country, and travel outside every foreign country costs full days only when it runs to 24 hours or more. That is why the IRS overnight flight from London to Stockholm loses nothing while the ship from Norway to Portugal loses three days.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test" }, { "statement": "The waiver country list always runs a year behind the year on its number. Rev. Proc. 2026-16 names the countries whose time requirement is waived for 2025 departures, not 2026 ones. The IRS publishes each year's list early in the following year, so the list covering departures during 2026 is not expected until early 2027. Any page that names the countries has to name the year they belong to.", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "statement": "Excluded income still has to be reported. The exclusion applies only if you file a US return reporting the income and attach Form 2555 to elect it. There is no threshold below which an American abroad can simply not file.", "source": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion" }, { "statement": "US territories are not foreign countries for this test. Days in Puerto Rico, Guam, the US Virgin Islands, the Northern Mariana Islands or American Samoa do not count toward the 330, and neither do days in the Antarctic region or on an offshore installation outside any country's territorial waters.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" } ], "confidence": "P", "openQuestions": null, "corrections": [ { "field": "rules[inUnitedStatesWhileInTransit].statement", "was": "If you are in transit between two points outside the United States and are physically present in the United States for less than 24 hours, you are not treated as present in the United States. You are treated as travelling over areas not within any foreign country, so the day still is not a full day abroad.", "now": "The transit rule is stated, and the conclusion is reversed: because the transit is treated as travel over areas not within any foreign country, the change of location rule governs, and full days are lost only when the stretch outside every foreign country runs to 24 hours or more. A short US layover between two foreign points does not cost the day.", "why": "Treas. Reg. 1.911-2(d)(2) says an individual who has been present in a foreign country and then travels over areas not within any foreign country for less than 24 hours 'shall not be deemed outside a foreign country during the period of travel', and Form 2555 line 18 tells the filer to exclude travel between foreign countries that did not involve being in or over the United States for 24 hours or more. The original wording took days away from readers who are entitled to them." }, { "field": "gotchas[transit]", "was": "A stop in the United States of less than 24 hours while in transit between two foreign points is not treated as presence in the United States, but the day is still not a full day in a foreign country. It is treated as travel over areas not within any foreign country, so it does not count toward the 330 either.", "now": "Rewritten to say the opposite, that the day is not lost, and anchored to the two IRS change of location examples (London to Stockholm loses nothing, Norway to Portugal by ship loses three days).", "why": "Same regulation and same form line as the correction above. This was the collection's most consequential error, and it was stated twice." }, { "field": "gotchas[travel budget]", "was": "A day partly in the air over international waters is not a full day in a foreign country, so a single long trip home can cost three days rather than one.", "now": "Scoped to what the IRS actually says: time on or over international waters when you leave the United States for a foreign country, or return from one, does not count, illustrated with the IRS June 10 to June 12 France example, and the cost of a round trip home stated as the departure day, the days in the United States, and the day you fly back in.", "why": "As written it was too broad and contradicted the change of location rule, under which the overnight London to Stockholm flight crosses non-foreign airspace at midnight and loses no full days. The 'three days rather than one' figure was not in any source." }, { "field": "rules[testIsMechanical].statement", "was": "It is open to US citizens and to resident aliens, unlike the bona fide residence test.", "now": "US citizens and all resident aliens can use the physical presence test, while the bona fide residence test is open to US citizens and to resident aliens who are citizens or nationals of a country with which the United States has an income tax treaty in effect.", "why": "Form 2555 instructions, Part II, and Publication 54 (Rev. December 2025) chapter 4 both list the treaty-country resident alien as eligible for bona fide residence. The original implied no resident alien can use that test." }, { "field": "rules[internationalWatersOrAirspace].article", "was": "Treas. Reg. 1.911-2(h); Form 2555 instructions, Foreign Country", "now": "Treas. Reg. 1.911-2(d)(2) and (h); Form 2555 instructions, Foreign Country", "why": "Paragraph (h) is only the geographic definition of 'foreign country'. The rule that travel over non-foreign areas does not count as presence is in paragraph (d)(2), Determination of physical presence." }, { "field": "rules[passingOverAForeignCountry].article", "was": "Treas. Reg. 1.911-2(d); Pub. 54, chapter 4", "now": "Treas. Reg. 1.911-2(d)(2)", "why": "Publication 54 (Rev. December 2025) no longer carries this example. Chapter 4 states the 330 day rule and refers the reader to the irs.gov physical presence page. Citing a chapter that does not hold the example would not survive a reader checking it." }, { "field": "rules[twelveMonthPeriodAnyStartDay].source", "was": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test", "now": "https://www.irs.gov/pub/irs-pdf/i2555.pdf", "why": "The claim that the period must include 365 days, or 366 in a leap year, part of which falls in the tax year, appears in the Form 2555 instructions for line 16. The irs.gov page gives the four 12 month rules but does not state the 365 day length, so the source did not carry the sentence." }, { "field": "rules[shiftPeriodToMaximizeExclusion].source", "was": "https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion", "now": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-physical-presence-test", "why": "The two sentences quoted, about not having to start with your first full day abroad and about overlapping 12 month periods, are rules 3 and 4 under 'How to figure the 12-month period' on the physical presence page, not on the figuring page." }, { "field": "rules[fullDayDefinition].statement", "was": "A full day is a period of 24 consecutive hours beginning and ending at midnight, and you must spend the whole of it in a foreign country or countries for it to count. A partial day abroad is not a full day.", "now": "Same definition, with the change of location softening added: travel from a foreign country over areas not within any foreign country for less than 24 hours does not put you outside a foreign country.", "why": "Without the caveat the definition reads as contradicting the IRS London to Stockholm example, which is the case most readers are actually in." }, { "field": "rules[daysInViolationOfUSLaw].statement", "was": "income earned there during the violation is not foreign earned income", "now": "income earned from sources in that country for services performed during the violation is not foreign earned income", "why": "IRC 911(d)(8)(A)(i) and the IRS exceptions page both limit this to income from sources within that country attributable to services performed during the period. The looser wording could be read as reaching all income." }, { "field": "gotchas (new)", "was": "not present", "now": "Added a gotcha stating that the waiver country list runs a year behind its own number: Rev. Proc. 2026-16 covers 2025 departures, and the list for 2026 departures is not expected until early 2027.", "why": "The task's own risk: a 2026 page naming Rev. Proc. 2026-16 can read as a 2026 country list. The collection flagged this only in note, which is not where a page author looks." }, { "field": "rules[foreignCountryDefinition]", "was": "list omitted the Northern Mariana Islands", "now": "the Northern Mariana Islands added to the list of US territories, and the 12 nautical mile figure attributed to the foreign earned income exclusion specifically", "why": "The IRS tax home page lists the Commonwealth of the Northern Mariana Islands among the territories that are not foreign countries, and frames the 12 nautical mile territorial waters figure as a rule for this exclusion. The number stays in the sentence rather than the number field, because the gate's unit list does not carry nautical miles." }, { "field": "amounts[maxExclusion].setBy and any 3.39 citation", "was": "Rev. Proc. 2025-32 section 3.39", "now": "Rev. Proc. 2025-32 section 4.39", "evidence": "Read the document: SECTION 3 is '2025 ADJUSTED ITEMS AS MODIFIED, SUPERSEDED OR SUPPLEMENTED' and SECTION 4 is '2026 ADJUSTED ITEMS'. The 2026 exclusion of $132,900 is at 4.39. Two verifiers disagreed; resolved against the source." } ], "reviewNotes": [ { "question": "The collection carried openQuestions: null. Was there anything genuinely unsettled that should have been recorded?", "resolution": "No open question survives. Every rule and every gotcha was re-read against a primary source in this pass, and the eleven disagreements found are recorded in corrections rather than left open. The record stays graded P.", "evidence": "Sources re-read in full: 26 USC 911 (uscode.house.gov prelim text), 26 CFR 1.911-2 (eCFR current text), Publication 54 (Rev. December 2025), Form 2555 (2025) and its instructions (Sep 17, 2025), the IRS physical presence test, tax home, figuring the exclusion and exceptions pages, Rev. Proc. 2025-32 and Rev. Proc. 2026-16." }, { "question": "Is the 330 full days figure and the definition of a full day right?", "resolution": "Confirmed. IRC 911(d)(1)(B) and Treas. Reg. 1.911-2(a)(2)(ii) both say at least 330 full days during any period of twelve consecutive months. Treas. Reg. 1.911-2(d)(2) defines a full day as a continuous period of twenty-four hours beginning with midnight and ending with the following midnight. The Form 2555 instructions say the same in shorter words.", "evidence": "Rev. Proc. 2026-16 section 2.02 restates the statute verbatim; 26 CFR 1.911-2(d)(2); Instructions for Form 2555 (2025), Part III." }, { "question": "Are the four travel rules stated correctly, including the worked examples?", "resolution": "Three of the four were correct and their examples match the IRS text word for word: international waters on departure from or return to the United States (France, June 10 to June 12), passing over a foreign country before midnight (Spain, June 11), and change of location (London to Stockholm loses nothing, Norway to Portugal by ship loses July 6, 7 and 8). The fourth, the US transit rule, reached the wrong conclusion and was corrected.", "evidence": "IRS physical presence test page, sections Full day, Passing over foreign country, Change of location, In United States while in transit; 26 CFR 1.911-2(d)(2); Form 2555 line 18 instruction on the form face." }, { "question": "Are the 12 month window rules right, and does any of them come from a source that does not say it?", "resolution": "The rules are right. A period may begin with any day and ends the day before the corresponding day twelve months later; it must be consecutive months; it need not start on your first day abroad; periods may overlap; you may pick the one giving the largest exclusion. The 365 or 366 day length is in the Form 2555 line 16 instruction rather than the web page, so that source was corrected.", "evidence": "26 CFR 1.911-2(d)(1); IRS physical presence test page, How to figure the 12-month period; Instructions for Form 2555 (2025), Line 16." }, { "question": "Is the proration arithmetic right, and is it prorating against the right amount for 2026?", "resolution": "Both right. The formula is the annual maximum times qualifying days in the tax year divided by 365, or 366 in a leap year, which is IRC 911(b)(2)(A) computed on a daily basis. The amount for a 2026 return is $132,900, set by Rev. Proc. 2025-32 section 4.39 under IRC 911(b)(2)(D)(i), and the IRS figuring page now states the 2026 figure directly. 2026 is not a leap year, so 365 is the divisor. The IRS worked example (August 14, 140 days, 140/365) uses a bona fide residence fact pattern, but the IRS presents the part year rule as applying to either test, so the arithmetic carries over unchanged.", "evidence": "Rev. Proc. 2025-32 section 4.39, page text: 'For taxable years beginning in 2026, the foreign earned income exclusion amount under 911(b)(2)(D)(i) is $132,900'; IRS figuring the foreign earned income exclusion page, Limit on excludable amount and Part year exclusion; Form 2555 (2025) lines 37 to 40." }, { "question": "Form 2555 line numbers: are lines 16, 18 and 37 to 40 what the record says they are?", "resolution": "Yes, on the 2025 revision of the form, which is the current one. Line 16 is the 12 month period, line 17 the principal country of employment, line 18 the travel table, line 37 the maximum exclusion, line 38 qualifying days, line 39 the decimal ratio rounded to at least three places, line 40 the product. Line 37 prints $130,000 on the 2025 form because that is the 2025 amount; a 2026 form will print $132,900. The page should describe the lines, not quote the printed figure.", "evidence": "Form 2555 (2025), Parts III and VII." }, { "question": "Which tax year does Rev. Proc. 2026-16 cover, and are the countries and dates right?", "resolution": "It covers 2025 only, and the seven countries and dates in the record match the table exactly: Haiti January 1, Ukraine January 1, Democratic Republic of the Congo January 28, South Sudan March 7, Iraq June 11, Lebanon June 22, Mali October 30, all 2025. The procedure's own purpose section says it is for individuals who failed the section 911(d)(1) requirements 'for 2025'. A gotcha was added so a 2026 page cannot imply the list is a 2026 list.", "evidence": "Rev. Proc. 2026-16 sections 1 and 3.01, and section 3.02 on having to be resident or present on or before the departure date. It supersedes Rev. Proc. 2025-17 for the prior year." }, { "question": "Is the days in violation of US law rule stated correctly?", "resolution": "Yes, once narrowed. Presence in a foreign country in violation of US law is not treated as presence in a foreign country while the violation lasts, and income from sources within that country attributable to services performed during that period is not foreign earned income. Cuba is the only country to which travel restrictions currently apply, and Notice 2006-84 lets civilians performing services at the US Naval Base at Guantanamo Bay qualify. Publication 54 (Rev. December 2025) does not mention Cuba at all, so the IRS exceptions page is the live source.", "evidence": "IRC 911(d)(8)(A); IRS exceptions to the bona fide residence and the physical presence tests page, sections US travel restrictions and Civilians working in Guantanamo Bay, Cuba." }, { "question": "Does the substantial presence comparison in the gotchas agree with what the treaty pages already publish?", "resolution": "Yes, and the 31 day condition was added so the two do not differ in detail. data/tax-treaties.json shared.substantialPresenceTest carries currentYearMinDays 31, threeYearDays 183, and the one third and one sixth weights, which is what the gotcha now says.", "evidence": "data/tax-treaties.json shared.substantialPresenceTest; IRS substantial presence test page." }, { "question": "Does Publication 54 still carry the travel examples the collection's citations pointed at?", "resolution": "No, and the collection's own note said so while two article fields still cited 'Pub. 54, chapter 4' for those examples. Publication 54 (Rev. December 2025) chapter 4 states the 330 day rule in four lines and refers the reader to IRS.gov/FEIE-TaxHome and the physical presence page. Searching the publication finds no Stockholm, Portugal, Spain travel example or Cuba discussion. Those citations were removed.", "evidence": "Publication 54 (Rev. 12-2025), chapter 4, item 4b." }, { "question": "Does anything in this record depend on a figure taken from model memory rather than a gated source?", "resolution": "No. The only dollar figure is $132,900, read in Rev. Proc. 2025-32 section 4.39 and confirmed on the IRS figuring page. The only other numbers are 330, 24, 12, 365 and 12 nautical miles, each read in the statute, the regulation, the form or the IRS page cited beside it.", "evidence": "Rev. Proc. 2025-32 section 4.39; IRS figuring the foreign earned income exclusion page." } ], "note": "Every rule here was read on an irs.gov page, in the Form 2555 instructions, in Rev. Proc. 2025-32 or Rev. Proc. 2026-16, and cross-read against the statute at 26 USC 911 and the regulation at 26 CFR 1.911-2. Three timing points a page has to handle honestly. First, Publication 54 (Rev. December 2025) no longer carries the worked travel examples: it states the 330 day rule and sends the reader to the irs.gov physical presence and tax home pages, which is where the international waters, passing over a foreign country, change of location and transit examples now live. Cite those pages, not a chapter of Pub. 54 that no longer holds the detail. Second, the waiver list is always one year behind: Rev. Proc. 2026-16 covers departures during 2025, and the list covering 2026 departures is not expected until early 2027, so a 2026 page must name the year its country list applies to. Third, the dollar figure here is the 2026 maximum exclusion of $132,900 from Rev. Proc. 2025-32 section 4.39; the Form 2555 and its instructions currently in circulation are the 2025 revision and print $130,000 at line 37, which is right for 2025 and wrong for a 2026 return, so the page should describe what line 37 does rather than quote what it prints. The single most error-prone claim on this topic, and the one this pass reversed, is the US transit rule: a layover in the United States of less than 24 hours between two foreign points does not cost the day, because the regulation treats it as travel over areas not within any foreign country and such travel costs full days only at 24 hours or more." }, "bona-fide-residence": { "taxYear": 2026, "amounts": [], "rules": [ { "key": "entireTaxYearRequired", "statement": "You meet the bona fide residence test only if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. For anyone who files on a calendar year, that entire tax year runs January 1 through December 31, so a stay of any length that never covers one full January to December does not qualify.", "number": 1, "unit": "years", "article": "IRC 911(d)(1)(A)", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "whoCanUseTest", "statement": "Two kinds of taxpayer can use this test: a US citizen, or a US resident alien within the meaning of IRC section 7701(b)(1)(A) who is a citizen or national of a country with which the United States has an income tax treaty in effect. Every other resident alien has to use the physical presence test instead. The statute itself, IRC 911(d)(1)(A), names only US citizens; the extension to treaty country resident aliens is what the IRS publishes in Publication 54, the Form 2555 instructions and the note above Part II of Form 2555.", "number": null, "unit": null, "article": "Instructions for Form 2555, Part II, and Pub. 54, chapter 4, item 4a", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "whichTreatyCountry", "statement": "The treaty country is the country you are a citizen or national of, not the foreign country you are living in. Form 2555 line 7 asks which country you are a citizen or national of, and the Form 2555 instructions point to Table 3, List of Tax Treaties, at IRS.gov/TreatyTables for the countries that have an income tax treaty in effect with the United States. A green card holder from a country with no US treaty cannot use this test no matter where abroad they live.", "number": null, "unit": null, "article": "Instructions for Form 2555, Part II, and Form 2555, line 7", "source": "https://www.irs.gov/individuals/international-taxpayers/tax-treaty-tables" }, { "key": "intentAndFactsAndCircumstances", "statement": "Bona fide residence turns on intention, not on a day count. It depends on your intention about the length and nature of your stay, and the IRS says that where your words and your acts conflict, your acts carry more weight. The IRS decides case by case from the facts you report, giving consideration to the kind of quarters you occupy, whether your family went with you, your visa type, your employment agreement, your activities in the country, whether you paid tax to that country, and any other factor that shows whether the stay is indefinite or prolonged.", "number": null, "unit": null, "article": "Instructions for Form 2555, Part II, and Pub. 54, FAQ 2 under Meeting the Requirements of Either Test", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "oneYearAbroadIsNotEnough", "statement": "Living in a foreign country for a year does not by itself make you a bona fide resident. If you go abroad for a definite, temporary purpose and return to the United States once you accomplish it, you ordinarily are not a bona fide resident even if you worked there for a tax year or longer. An extended, indefinite stay in which you make your home there is what the test is looking for.", "number": null, "unit": null, "article": "Instructions for Form 2555, Part II, and Pub. 54, chapter 4, item 4a", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "briefTripsToUS", "statement": "Uninterrupted refers to the residence itself, not to your physical presence. You can leave for brief or temporary trips back to the United States or elsewhere, for vacation or for business, without breaking the period, as long as you clearly intend to return to your foreign residence or to a new foreign bona fide residence without unreasonable delay.", "number": null, "unit": null, "article": "Reg. 1.911-2(c) and Pub. 54, FAQ 3 under Meeting the Requirements of Either Test", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "partYearsAtEachEnd", "statement": "Once you have completed an uninterrupted period that includes an entire tax year, you count as a bona fide resident from the date the residence actually began until the date you abandon it. That means one full tax year can carry qualifying parts of one or two other tax years at either end, and you figure the exclusion from the start date rather than from January 1.", "number": null, "unit": null, "article": "Pub. 54, FAQ 1 and FAQ 2 under Meeting the Requirements of Either Test", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "statementOfNonresidence", "statement": "There are two ways a statement of nonresidence defeats this test, and both are binding. If you tell the authorities of the country where you claim residence that you are not a resident there, and your earned income is not subject to that country's income tax by reason of that nonresidency, you are not a bona fide resident of that country. Separately, if you have submitted such a statement and its accuracy has not been resolved on the date your bona fide residence is being determined, you are not treated as a bona fide resident as of that date either. The first branch is in the statute and the regulation; the second is in the regulation, the Form 2555 instructions and the IRS page, so a pending claim is enough to defeat the test in practice.", "number": null, "unit": null, "article": "IRC 911(d)(5) and Reg. 1.911-2(c), final sentence", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "treatyExemptionDoesNotDisqualify", "statement": "An income tax exemption provided in a treaty or another international agreement does not by itself stop you from being a bona fide resident. Whether a particular treaty blocks it is decided by reading all of the treaty, including any provisions on residence or on privileges and immunities.", "number": null, "unit": null, "article": "IRS bona fide residence test page, Special agreements and treaties", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "key": "taxHomeAlsoRequired", "statement": "Passing the bona fide residence test is not enough on its own. You must also have a tax home in a foreign country and foreign earned income, and you must make a valid election by attaching Form 2555 to your return or amended return. The tests and the tax home requirement are separate hurdles and you have to clear both.", "number": null, "unit": null, "article": "IRC 911(d)(1) and Pub. 54, chapter 4, Requirements", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "key": "adverseConditionsWaiver", "statement": "The minimum time requirement can be waived if you had to leave a foreign country because of war, civil unrest, or similar adverse conditions there. Early each year the IRS publishes an Internal Revenue Bulletin listing the only countries for which the requirement is waived for the prior year, with effective dates, and the waiver applies only to countries on that list. You must also show you could reasonably have expected to meet the time requirement otherwise, have your tax home in that country, and have been a bona fide resident of or physically present in it on or before the beginning date of the waiver.", "number": null, "unit": null, "article": "IRC 911(d)(4)", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" } ], "forms": [ { "form": "2555", "purpose": "Foreign Earned Income. Part II is where you claim the bona fide residence test, giving the dates your residence began and ended, your kind of living quarters, whether your family lived with you, whether you told the foreign authorities you were not a resident, your days in the United States, your visa type and contract terms, and whether you kept a home in the United States.", "source": "https://www.irs.gov/pub/irs-pdf/f2555.pdf" }, { "form": "2350", "purpose": "Application for Extension of Time To File US Income Tax Return, for people abroad who expect to qualify under the bona fide residence test but not until after the return is due. The extension generally runs to 30 days beyond the date you expect to qualify.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "form": "1040-X", "purpose": "Amended US Individual Income Tax Return. If you file and pay before you qualify, this is how you claim the exclusion afterwards, with Form 2555 attached, for a refund of the excess tax paid.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" } ], "gotchas": [ { "statement": "Most resident aliens cannot use this test at all. It is open to US citizens, and to resident aliens only where they are a citizen or national of a country with an income tax treaty in effect with the United States. Form 2555 carries that restriction as a note right above Part II, and the instructions send you to Table 3 at IRS.gov/TreatyTables for the list.", "source": "https://www.irs.gov/pub/irs-pdf/f2555.pdf" }, { "statement": "A full year abroad is not the same as a full tax year abroad, and this is where most people fail. If you arrive on any date other than January 1, you cannot satisfy the test until the end of the following calendar year, so it takes longer than twelve months. The IRS example is a taxpayer who arrived in Lisbon on November 1, 2024 and transferred back to the United States on December 13, 2025: more than a year abroad, but no complete tax year, so the test fails and only the physical presence test is left.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "statement": "Telling the foreign country that you are not a resident there can defeat the test, and so can a claim that is still undecided. Form 2555 line 13a asks whether you submitted such a statement and line 13b whether you are required to pay income tax to that country. Answering yes to 13a and no to 13b means you do not qualify, and the form tells you to stop filling in that part. The Form 2555 instructions and the regulation go further: if you submitted the statement and the authorities have not resolved it, you are not treated as a bona fide resident as of that date.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "Time abroad does not count if you are in the country in violation of US travel restrictions. For any period of violation you are not treated as a bona fide resident, the income you earn there is not foreign earned income, and your housing costs there do not count toward the housing amount. The IRS says Cuba is currently the only country these restrictions apply to, and Notice 2006-84 carves out civilians working at the US Naval Base at Guantanamo Bay.", "source": "https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "statement": "The IRS cannot tell you in advance whether you qualify. The determination is made largely from the facts you report on Form 2555 and only after you file it, so there is no ruling to obtain first and no checklist that guarantees the answer.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "statement": "The full tax year you rely on can be a different year from the one you are claiming the benefit for. The IRS says the uninterrupted period that includes an entire tax year may be the year before or after the year in which you claim a tax benefit for your time abroad, which is how a short first year abroad can be covered once the following full year is complete.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "statement": "Returning to the United States before the qualifying period is complete, even for a reason outside your control such as illness, means no exclusion for any of the time abroad. There is no partial credit, though foreign tax paid on that income may still be claimable as a credit or a deduction.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "A period abroad can survive a temporary recall to the United States. In the IRS example, a bona fide resident of Country X was recalled to New York for 90 days of orientation before taking up a post in Country Y, and because the period of foreign residence was never broken the taxpayer stayed a bona fide resident for that year.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" }, { "statement": "You may have to file before you know whether you qualify. If you file a return before meeting the test you must report worldwide income and pay the tax, then amend on Form 1040-X with Form 2555 attached once you qualify, unless you asked for more time on Form 2350 by the due date of the return.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" } ], "confidence": "P", "openQuestions": null, "corrections": [ { "field": "rules.statementOfNonresidence", "was": "Framed the pending claim branch as the IRS web page and the Form 2555 instructions going beyond IRC 911(d)(5), and recommended publishing only the statutory two part test because the form and the statute were the safer basis.", "now": "Both branches are published as binding rule. Reg. 1.911-2(c) ends with the pending claim sentence in its own text, so the broader reading is the regulation, not IRS overreach. The rule now states the completed determination branch and the unresolved statement branch, and says which authority carries each.", "why": "The collector read the statute and the form but not the regulation it cited. A reader who filed a nonresidence statement and is waiting on the foreign authority would have been told they might still qualify, which the regulation says they do not." }, { "field": "note", "was": "Said the Instructions for Form 2555 overstate the statement of nonresidence rule and that the divergence should be described rather than resolved.", "now": "Rewritten. There is no divergence to describe on the substance: the regulation carries the pending claim rule. What differs is only wording between the statute, the regulation, the instructions and the form." }, { "field": "rules.whoCanUseTest.article", "was": "IRC 911(d)(1)(A) and Form 2555, Part II note", "now": "Instructions for Form 2555, Part II, and Pub. 54, chapter 4, item 4a", "why": "IRC 911(d)(1)(A) reads 'a citizen of the United States' and says nothing about resident aliens. Reg. 1.911-2(a)(2)(i) is the same. Citing the statute for a rule the statute does not contain is the kind of error that survives review because the conclusion is right." }, { "field": "rules.whichTreatyCountry", "was": "absent", "now": "New rule. The treaty country is the country you are a citizen or national of, not the country you live in, and Table 3 at IRS.gov/TreatyTables is the list the Form 2555 instructions point to.", "why": "The task asked which treaties and what citizen or national of a treaty country means. The collector recorded the restriction without either answer." }, { "field": "rules.intentAndFactsAndCircumstances", "was": "Attributed the factor list and the words versus actions rule to Reg. 1.911-2(c), and included participation in community life as a factor.", "now": "Attributed to the Instructions for Form 2555 Part II and Pub. 54 FAQ 2, which are where that language actually appears. Participation in community life removed.", "why": "Reg. 1.911-2(c) does not list factors. It says to apply the principles of section 871 and its regulations. No IRS source read for this topic names community participation as a factor, so it was a fabricated item in an otherwise sourced list." }, { "field": "rules.oneYearAbroadIsNotEnough.article", "was": "Reg. 1.911-2(c)", "now": "Instructions for Form 2555, Part II, and Pub. 54, chapter 4, item 4a", "why": "The definite temporary purpose rule is not in Reg. 1.911-2(c). It is in the Form 2555 instructions, Pub. 54 chapter 4 and the IRS page." }, { "field": "rules.partYearsAtEachEnd.article", "was": "IRC 911(d)(1)(A) and Reg. 1.911-2(c)", "now": "Pub. 54, FAQ 1 and FAQ 2 under Meeting the Requirements of Either Test", "why": "Neither the statute nor the regulation states the part year rule. Pub. 54 and the IRS page do." }, { "field": "rules.treatyExemptionDoesNotDisqualify.article", "was": "Reg. 1.911-2(c)", "now": "IRS bona fide residence test page, Special agreements and treaties", "why": "Reg. 1.911-2(c) does not mention treaty exemptions. The rule is stated on the IRS page." }, { "field": "rules.adverseConditionsWaiver.statement", "was": "Named the annual Bulletin list and the reasonable expectation condition.", "now": "Adds the two further conditions the IRS exceptions page states: your tax home must be in that country, and you must have been a bona fide resident of or physically present in it on or before the beginning date of the waiver.", "why": "A reader who left a listed country but arrived after the waiver start date would have thought the waiver covered them." }, { "field": "gotchas, travel restrictions", "was": "Stated the rule without naming any country.", "now": "Names Cuba as the only country the IRS says the restrictions currently apply to, and the Guantanamo Bay carve out in Notice 2006-84." }, { "field": "forms", "was": "Form 1040-X left out because the collector believed the gate's form number pattern accepts only a two letter suffix.", "now": "Form 1040-X added. The pattern in scripts/verify-expat-residency.js is 1 to 4 characters of A to Z or 0 to 9 after the hyphen, and 1040-X matches it. Tested against the live regex before adding." }, { "field": "gotchas, full tax year can be a different year", "was": "absent", "now": "Added. The IRS page says the entire tax year may be the year before or after the year in which you claim the benefit." } ], "reviewNotes": [ { "question": "The collector left openQuestions null, so there were none to resolve. What was checked instead?", "resolution": "Every rule, form and gotcha was re-read against the statute, the regulation and the IRS documents rather than against the collector's summary of them. Ten changes resulted, listed in corrections. Nine of the ten are citation or completeness fixes; one, the statement of nonresidence, would have changed what the page tells a reader to do.", "evidence": "26 USC 911(d) at uscode.house.gov, 26 CFR 1.911-2 at ecfr.gov, Pub. 54 (Rev. December 2025), Form 2555 (2025) and its instructions, and the two IRS web pages for the test and its exceptions." }, { "question": "Does the entire tax year requirement mean a calendar year filer needs a full January to December abroad?", "resolution": "Yes. IRC 911(d)(1)(A) requires an uninterrupted period that includes an entire taxable year, and the IRS page and Pub. 54 FAQ 1 both say that for a calendar year filer the entire tax year is January 1 through December 31. Unless residence was established on January 1, it takes more than a year of living abroad before the test is met. Confirmed as collected.", "evidence": "IRC 911(d)(1)(A); Pub. 54 FAQ 1 under Meeting the Requirements of Either Test; https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test" }, { "question": "Can a resident alien use this test only where a treaty non-discrimination article applies, and which treaties are those?", "resolution": "No irs.gov source read for this topic frames it as a non-discrimination article. Every IRS source states the condition in the same simpler terms: a US resident within the meaning of IRC 7701(b)(1)(A) who is a citizen or national of a country with which the United States has an income tax treaty in effect. The Form 2555 instructions give the list as Table 3, List of Tax Treaties, at IRS.gov/TreatyTables. Pub. 54 does discuss non-discrimination provisions, but in the different sense of a treaty country not discriminating against US citizens living there, which is not this rule. So the page publishes the IRS formulation and points at Table 3, and does not publish a non-discrimination framing the IRS does not use.", "evidence": "Instructions for Form 2555 (2025), Part II; Pub. 54 chapter 4 item 4a and FAQ 6; Form 2555 (2025) Part II note; https://www.irs.gov/individuals/international-taxpayers/tax-treaty-tables Table 3" }, { "question": "What does citizen or national of a treaty country mean, and which country is it?", "resolution": "It is the taxpayer's own citizenship or nationality, not the country they are living in abroad and not their US residence. Form 2555 line 7 asks directly, of what country are you a citizen or national. So a green card holder who is a national of a country with no US treaty cannot use this test even if they are living in a treaty country, and a national of a treaty country can use it while living in a country that has no treaty with the United States. Published as a new rule, whichTreatyCountry.", "evidence": "Form 2555 (2025) line 7 and Part II note; Instructions for Form 2555 (2025), Part II" }, { "question": "The collector flagged that the Form 2555 instructions and the IRS page state the nonresidence statement rule more broadly than IRC 911(d)(5), a pending claim rather than only a decided one, and chose the statute. Which should the page publish?", "resolution": "Both, because the broader reading is the regulation and not a paraphrase. IRC 911(d)(5) requires both that the individual submitted the statement and that the individual is held not subject as a resident to that country's income tax on the earnings. Reg. 1.911-2(c) restates that two part test and then adds its own sentence: if an individual has submitted a statement of nonresidence the accuracy of which has not been resolved as of any date when a determination of bona fide residence is being made, the individual will not be considered a bona fide resident as of that date. That sentence is in the regulation, which is binding, so the Form 2555 instructions and the IRS page are not going beyond authority. It is also what a reader faces in practice, since the IRS decides after the return is filed and a pending foreign determination will still be pending then. The collector's recommendation to publish only the statutory branch would have understated the risk for exactly the reader most likely to be looking. Form 2555 itself is narrower than both, since lines 13a and 13b only capture the decided case, but a form's question set is not a statement of the rule.", "evidence": "26 USC 911(d)(5); 26 CFR 1.911-2(c), final sentence; Instructions for Form 2555 (2025), Lines 13a and 13b; https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test, Statement to foreign authorities" }, { "question": "Do the three sources word the second condition the same way?", "resolution": "No, and the difference is worth keeping out of the published statement rather than papering over. The statute says the individual is held not subject as a resident of that country to its income tax with respect to those earnings. The regulation says the earned income is not subject, by reason of nonresidency, to the income tax of that country. The instructions say the authorities hold that you are not subject to their income tax laws by reason of nonresidency. The published rule uses the regulation's wording, which is the narrowest of the three and ties the test to the income rather than to the person.", "evidence": "26 USC 911(d)(5)(B); 26 CFR 1.911-2(c)(2); Instructions for Form 2555 (2025), Lines 13a and 13b" }, { "question": "Is the back dating of part years correct as collected?", "resolution": "Yes on substance, wrong on citation. Once the uninterrupted period including a full tax year is complete, bona fide residence runs from the date residence actually began to the date it is abandoned, so parts of one or two other tax years can qualify and the exclusion is figured from the start date. The authority is the IRS page and Pub. 54 FAQ 1 and 2, not IRC 911(d)(1)(A) or Reg. 1.911-2(c), neither of which says it. The IRS page's own worked example on this point is internally odd, since it names 2023 as the full year when 2024 was also full, so the example is not reproduced on the page.", "evidence": "Pub. 54 FAQ 1 and FAQ 2 under Meeting the Requirements of Either Test; https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-bona-fide-residence-test, Bona Fide Resident for Part of a Year" }, { "question": "Is the brief trips rule correct as collected?", "resolution": "Yes. Reg. 1.911-2(c) says bona fide residence for an uninterrupted period may be established even if temporary visits are made to the United States or elsewhere on vacation or business, and Pub. 54 FAQ 3 says uninterrupted refers to the bona fide residence proper and not to physical presence, adding the requirement of a clear intention to return without unreasonable delay. Pub. 54 FAQ 4, the 90 day recall to New York for orientation, is the worked case and is kept as a gotcha. Note this is the opposite of the physical presence test, where the same trip costs days.", "evidence": "26 CFR 1.911-2(c); Pub. 54 FAQ 3 and FAQ 4 under Meeting the Requirements of Either Test" }, { "question": "Is the adverse conditions waiver correct and complete as collected?", "resolution": "Correct but incomplete. IRC 911(d)(4) carries the waiver and the reasonable expectation condition, and the IRS exceptions page confirms that early each year the IRS publishes an Internal Revenue Bulletin listing the only countries waived for the prior year, with effective dates. The collector missed two conditions on that same page: the tax home must be in the foreign country, and the taxpayer must have been a bona fide resident of or physically present in it on or before the beginning date of the waiver. It also missed the IRS note that even with the waiver, only days of actual residence or presence count when figuring the exclusion. The first two are added to the rule. No country list is published here, because the current year's Bulletin was not read for this topic and a list is exactly the kind of figure the number rule forbids writing from memory.", "evidence": "26 USC 911(d)(4); Pub. 54, People who failed to meet eligibility requirements because of adverse conditions in a foreign country; https://www.irs.gov/individuals/international-taxpayers/exceptions-to-the-bona-fide-residence-and-the-physical-presence-tests" }, { "question": "Is the collector's claim about Publication 54 correct?", "resolution": "Yes. Pub. 54 is revised December 2025, has moved to a continuous use revision, and chapter 4 now states the bona fide residence rule in a few lines and sends the reader to IRS.gov/FEIE-BonaFideResidence. The worked examples survive only in the FAQ chapter. So the IRS web page is the primary text for this topic and is cited as the source for the rules it alone states.", "evidence": "Pub. 54 (Rev. December 2025), What's New and chapter 4 item 4a" }, { "question": "Is the collector's claim that Form 1040-X would fail the gate correct?", "resolution": "No. The pattern in scripts/verify-expat-residency.js allows 1 to 4 characters of A to Z or 0 to 9 after the hyphen, so 1040-X matches. Verified by running the live regex against 1040-X, 1040-NR, 2350 and 2555. Form 1040-X is added to forms.", "evidence": "scripts/verify-expat-residency.js, forms pattern; Pub. 54 FAQ 12 under Meeting the Requirements of Either Test" }, { "question": "Are the 2026 forms available, and does the tax year label hold?", "resolution": "Not available. The current releases are Form 2555 (2025) and its 2025 instructions, and Pub. 54 is the December 2025 continuous use revision. This topic publishes no dollar amounts, and every rule here is statutory or regulatory and unchanged, so the 2026 label describes which filing season the page addresses rather than any inflation adjusted figure. If a rule changes, it will change in the statute or the regulation, not in an annual revenue procedure.", "evidence": "Form 2555 (2025) footer; Instructions for Form 2555 (2025); Pub. 54 (Rev. December 2025)" } ], "note": "Publication 54 was revised December 2025, moved to a continuous use revision, and no longer carries the detailed bona fide residence discussion: chapter 4 states the rule in a few lines and sends the reader to IRS.gov/FEIE-BonaFideResidence, so the IRS web page is the primary text for this topic and the FAQ chapter is where the worked examples survive. On the statement of nonresidence, the collector reported that the Form 2555 instructions and the IRS page state the rule more broadly than IRC 911(d)(5) and recommended publishing only the statute. That is wrong, and it is the one correction here that changes what a reader would do. Reg. 1.911-2(c) ends with its own sentence saying that an unresolved statement of nonresidence defeats bona fide residence as of the date the determination is made. The broader reading is the regulation, which is binding, so the page publishes both branches. Form 2555 lines 13a and 13b are narrower than both the statute and the regulation because they only capture the decided case, which is a limit of the form's question set rather than a statement of the rule. Separately, the statute limits this test to US citizens; the extension to resident aliens who are citizens or nationals of treaty countries is published by the IRS in Pub. 54, the Form 2555 instructions and the note above Part II of Form 2555, and no IRS source read for this topic describes it as resting on a treaty non-discrimination article, so the page does not say so. The list of treaty countries is Table 3, List of Tax Treaties, at IRS.gov/TreatyTables, and the relevant country is the reader's own citizenship or nationality, not where they live. This topic has no dollar amounts, so the tax year label is about which filing season the page addresses." }, "tax-home": { "taxYear": 2026, "amounts": [], "rules": [ { "key": "travelTaxHomeDefinition", "statement": "For deducting travel expenses, your tax home is generally your regular place of business or post of duty, regardless of where you keep your family home. It is a work location, not a house.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Tax Home", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "taxHomeIncludesGeneralArea", "statement": "A tax home is not a single address. It includes the entire city or general area in which your business or work is located.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Tax Home; Tax Topic 511", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "feieTaxHomeDefinition", "statement": "For the foreign earned income exclusion, the IRS defines your tax home as the general area of your main place of business, employment, or post of duty, regardless of where you keep your family home, and as the place where you are permanently or indefinitely engaged to work as an employee or a self-employed individual.", "number": null, "unit": null, "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Tax home", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "taxHomeIsNotResidenceOrDomicile", "statement": "Having a tax home in a given location does not necessarily mean that location is your residence or your domicile for tax purposes. Tax home is a work concept, not a home concept.", "number": null, "unit": null, "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Tax home", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "mainPlaceOfBusiness", "statement": "If you have more than one regular place of work, your tax home is your main place of business. Three things decide which one that is: the total time you ordinarily spend in each place, the level of your business activity in each place, and whether the income from each place is significant or insignificant. The IRS says the most important consideration of the three is the length of time you spend at each location.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Main place of business or work; Tax Topic 511", "source": "https://www.irs.gov/taxtopics/tc511" }, { "key": "noRegularWorkplaceThreeFactors", "statement": "If the nature of your work gives you no regular or main place of business, your tax home may be the home where you regularly live. Three factors decide it: you do part of your business in the area of that main home and use it for lodging while doing so, you have living expenses at that main home that you duplicate because your business requires you to be away from it, and you have not abandoned the area where your historical place of lodging and your claimed main home are located, or family live at that main home, or you often use it for lodging.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Factors used to determine tax home", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "itinerantRule", "statement": "Satisfy all three factors and your tax home is the home where you regularly live. Satisfy only two and you may have a tax home, depending on all the facts and circumstances. Satisfy only one, and in the IRS worked example none at all, and you are an itinerant, also called a transient: your tax home is wherever you work, so you are never treated as traveling away from home and can never claim a travel expense deduction.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Factors used to determine tax home, and Example 2", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "temporaryAssignmentDoesNotMoveTaxHome", "statement": "If your assignment or job away from your main place of work is temporary, your tax home does not change and you are treated as away from home for the whole period you are away. Generally, a temporary assignment in a single location is one that is realistically expected to last, and does in fact last, for 1 year or less.", "number": 1, "unit": "years", "article": "Pub. 463 (2025), chapter 1, Temporary assignment vs. indefinite assignment", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "indefiniteAssignmentMovesTaxHome", "statement": "An assignment or job in a single location is indefinite if it is realistically expected to last more than 1 year, whether or not it actually does. An indefinite assignment makes that location your new tax home, so you cannot deduct travel expenses there, and you must include in income any amounts your employer pays you for living expenses even if they are called travel allowances and you account for them.", "number": 1, "unit": "years", "article": "Pub. 463 (2025), chapter 1, Temporary assignment vs. indefinite assignment", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "expectationTestedAtTheStartAndWhenItChanges", "statement": "You must decide whether an assignment is temporary or indefinite when you start the work, based on what you realistically expect then. An assignment that is initially temporary may become indefinite because circumstances change, and a series of assignments to the same location, each short but together covering a long period, may be treated as one indefinite assignment.", "number": null, "unit": null, "article": "Pub. 463 (2025), chapter 1, Determining temporary or indefinite", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "key": "oneYearRuleAndItsOnlyException", "statement": "The 1-year line is a cap, not a guideline. The IRS states flatly that any work assignment in excess of one year is considered indefinite. The one carve out in Publication 463 is a federal employee whom the Attorney General, or their designee, certifies as traveling for the federal government in a temporary duty status to investigate or prosecute a federal crime, or to provide support services for that investigation or prosecution.", "number": 1, "unit": "years", "article": "Tax Topic 511, Business travel expenses; Pub. 463 (2025), chapter 1, Exception for federal crime investigations or prosecutions", "source": "https://www.irs.gov/taxtopics/tc511" }, { "key": "feieTaxHomeTest", "statement": "To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. This is a separate requirement from the two qualifying tests, and failing it disqualifies you even if you meet them.", "number": null, "unit": null, "article": "Instructions for Form 2555 (2025), Tax home test; Pub. 54 (Rev. 12-2025), chapter 4, Requirements", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "feieDefinitionMatchesTravelPlusAbode", "statement": "The tax home definition the IRS gives for the exclusion is the same work based definition used for travel expenses, your regular or principal place of business, employment, or post of duty, regardless of where you keep your family residence. What the exclusion adds on top of it is the abode rule, which has no equivalent in the travel expense guidance.", "number": null, "unit": null, "article": "Instructions for Form 2555 (2025), Tax home test, compared with Pub. 463 (2025), chapter 1, Tax Home", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "abodeRule", "statement": "You are not considered to have a tax home in a foreign country for any period during which your abode is in the United States. If your abode is in the United States, you do not meet the tax home test and cannot claim the foreign earned income exclusion.", "number": null, "unit": null, "article": "Instructions for Form 2555 (2025), Tax home test; IRS, Foreign earned income exclusion: tax home in foreign country, Abode", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "abodeDistinguishedFromTaxHome", "statement": "Abode has been variously defined as your home, habitation, residence, domicile, or place of dwelling. It does not mean your principal place of business. The IRS puts it directly: abode has a domestic rather than a vocational meaning and does not mean the same as tax home. Where your abode is often depends on where you maintain your economic, family, and personal ties.", "number": null, "unit": null, "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Abode", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "abodeUsDwellingNotDecisive", "statement": "Your abode is not necessarily in the United States merely because you keep a dwelling there, whether or not your spouse or dependents use it, and it is not necessarily in the United States while you are temporarily in the United States. The IRS says those facts can contribute to your having an abode in the United States, not that they settle it.", "number": null, "unit": null, "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Abode", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "abodeCombatZoneException", "statement": "The IRS states one exception to the abode rule. For tax years beginning after December 31, 2017, a US citizen or resident serving in support of the US Armed Forces in an area the President has designated by Executive order as a combat zone for purposes of section 112 can qualify as having a tax home in the foreign country of the combat zone even with an abode in the United States. The IRS keeps the list of recognized combat zones at IRS.gov/Newsroom/Combat-Zones.", "number": null, "unit": null, "article": "Instructions for Form 2555 (2025), Service in a combat zone; IRS, Foreign earned income exclusion: tax home in foreign country, Abode", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "key": "feieNoRegularWorkplace", "statement": "For the exclusion, if you have no regular or principal place of business because of the nature of your trade or business, your tax home is your regular place of abode, meaning simply the place where you regularly live. If you have neither a regular or main place of business nor a place where you regularly live, the IRS considers you an itinerant and your tax home is wherever you work.", "number": null, "unit": null, "article": "Instructions for Form 2555 (2025), Tax home test, for the first sentence; IRS, Foreign earned income exclusion: tax home in foreign country, Tax home, for the itinerant sentence", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "feieTemporaryVersusIndefiniteAbroad", "statement": "If your foreign work assignment is for an indefinite period and your abode is not in the United States, your tax home is in a foreign country. If you are only temporarily absent from your tax home in the United States on business, you do not qualify for the exclusion. The same 1-year line applies: if you expect employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise, and if you expect it to last more than 1 year it is indefinite.", "number": 1, "unit": "years", "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Temporary or indefinite assignment", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "key": "feieExpectationCanChangeMidAssignment", "statement": "If you expect the employment to last 1 year or less but at some later date expect it to last longer than 1 year, it is temporary, absent facts and circumstances indicating otherwise, until your expectation changes. The IRS applies the change from that point forward rather than back to the start: in its travel expense guidance, expenses become nondeductible when the expectation changes, and the earlier months stay deductible.", "number": 1, "unit": "years", "article": "IRS, Foreign earned income exclusion: tax home in foreign country, Temporary or indefinite assignment; Tax Topic 511; Pub. 463 (2025), chapter 1, Example 3", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" } ], "forms": [ { "form": "2555", "purpose": "Claims the foreign earned income exclusion and the foreign housing exclusion or deduction. Line 9 asks you to enter your tax home or homes and the dates each was established, so the tax home test is answered on the face of the form.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "form": "2350", "purpose": "Applies for a special extension of time to file when you will not have met the physical presence test or the bona fide residence test by the due date of your return. You must file it before your return is due.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "form": "2106", "purpose": "Deducts employee travel away from a tax home. For tax years beginning after 2017, the only taxpayers who can use it are Armed Forces reservists, performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses.", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" } ], "gotchas": [ { "statement": "Tax home means two different things depending on what you are claiming. For travel expenses it is only the general area of your main place of work. For the foreign earned income exclusion it is that same work based definition plus the rule that you cannot have a foreign tax home for any period your abode is in the United States. A reader who learns the travel expense version and stops there will get the exclusion wrong.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "Abode and tax home are not synonyms and the IRS says so in as many words. Abode is domestic and follows your family, economic, and personal ties. Tax home is vocational and follows your work. You can have a foreign tax home and an American abode at the same time, and if you do, the exclusion is gone.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "The IRS worked example that costs people the exclusion is the rotational worker: employed on an offshore rig in a foreign country's territorial waters on a 28 day on, 28 day off schedule, returning to the family residence in the United States between hitches. The IRS says that person is considered to have an abode in the United States, does not satisfy the tax home test, and can claim neither exclusion nor the housing deduction.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "Offshore work can fail on the map as well as on abode. For the exclusion, territorial waters means within 12 nautical miles of the foreign country, and the term foreign country does not include international waters or airspace, nor offshore installations located outside any foreign country's territorial waters.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "A short posting abroad can fail the exclusion for a reason most people do not see coming. A single location assignment realistically expected to last 1 year or less is temporary, and a temporary assignment does not move your tax home. Your tax home stays where it was for the whole posting, so you may never have a foreign tax home to claim the exclusion with, no matter how many days you were abroad.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "The test is what you realistically expected, not only what happened. In the IRS example, expect 8 months and stay 10 and the job is still temporary. Expect 18 months and leave after 10 and the job was indefinite from the start, and the location was your tax home the whole time.", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "statement": "Meeting the physical presence test or the bona fide residence test is not enough on its own. The tax home test is a separate requirement that must hold throughout the whole qualifying period, and Form 2555 line 9 asks for the dates your tax home was established.", "source": "https://www.irs.gov/pub/irs-pdf/i2555.pdf" }, { "statement": "Never having a tax home is a real outcome, not a loophole. An itinerant, someone with no regular or main place of business or post of duty and no place they regularly live, has a tax home wherever they work. That means they are never considered to be traveling away from home and cannot claim a travel expense deduction.", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "statement": "Keeping a house in the United States does not automatically create an American abode, even if your spouse and dependents use it. The IRS treats it as one contributing fact among your family, economic, and personal ties, not as a decisive one.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "A probationary period cuts the other way from how it sounds. If you take a job that requires you to move, on the understanding that you keep it if your work is satisfactory during a probationary period, the job is indefinite, so the new location is your tax home and meals and lodging there are not deductible.", "source": "https://www.irs.gov/pub/irs-pdf/p463.pdf" }, { "statement": "A US territory is not a foreign country for this purpose. Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the US Virgin Islands, American Samoa and the Antarctic region are all outside the definition, so a tax home in any of them is not a foreign tax home for the exclusion.", "source": "https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country" }, { "statement": "Tax home also controls the automatic filing extension, which is why the phrase turns up twice on a return. Publication 54 gives two separate ways to get the automatic 2-month extension to June 15: you are living outside the United States and Puerto Rico and your main place of business or post of duty is outside them too, or you are in military or naval service on duty outside them. Either route works on its own, and neither stops interest running from April 15.", "source": "https://www.irs.gov/pub/irs-pdf/p54.pdf" } ], "confidence": "P", "openQuestions": null, "note": "Publication 54 no longer explains tax home itself. The December 2025 revision compresses it to a single sentence, that your tax home is generally your principal place of business, employment, or post of duty regardless of where you maintain your family home, and sends the reader to IRS.gov/FEIE-TaxHome for the rest. The abode rule, which is the single most disqualifying rule in the exclusion, does not appear anywhere in that publication: the only times Publication 54 uses the word abode are about the filing extension. So the guide most readers open will not tell them the rule most likely to cost them the exclusion. The Instructions for Form 2555 are the better single document, because they carry the tax home test and the abode rule on the same page, and the IRS web page at IRS.gov/feie-taxhome carries both plus the worked examples. One wording trap to carry into the copy: the Form 2555 instructions say that someone with no regular or principal place of business has a tax home at their regular place of abode, using abode in its ordinary sense of where you live, in the same section where abode is also the technical term that disqualifies you. Say which sense is meant both times. A second wording point: Publication 54 says principal place of business while the IRS web page says the general area of your main place of business, and Publication 463 spells out that the tax home includes the entire city or general area, so use the general area phrasing rather than Publication 54's narrower one.", "corrections": [ { "field": "note", "was": "Claimed that the shortcut printed in Publication 54, IRS.gov/FEIE-TaxHome, is case sensitive and returns a 404, while IRS.gov/feie-taxhome resolves.", "now": "Removed. Both spellings were requested on 2026-09-15 and both returned HTTP 200, redirecting to the same page. Publishing the 404 claim would have been a checkable factual error in a caution aimed at the IRS." }, { "field": "rules[taxHomeIsNotResidenceOrDomicile].statement", "was": "Having a tax home in a place does not make that place your residence or your domicile for tax purposes.", "now": "Restored the word necessarily, which the IRS page uses and the collector dropped. The IRS says a tax home does not necessarily mean that location is your residence or domicile, which is weaker than a flat denial." }, { "field": "rules[taxHomeDefinition]", "was": "One rule carrying the exclusion wording from the IRS web page while citing IRC 162(a)(2) and Pub. 463 chapter 1 as its article.", "now": "Split into travelTaxHomeDefinition, cited to Publication 463, and feieTaxHomeDefinition, cited to the IRS exclusion page. Publication 463 does not contain the sentence about being permanently or indefinitely engaged to work, so citing it for that wording was wrong, and the contract's whole point is that the two definitions stay separate." }, { "field": "rules[statutoryOneYearCapOnAwayFromHome]", "was": "Asserted the 1-year cap as the flush language of IRC 162(a) following paragraph (3), sourced to Publication 463, and described the only carve out as a federal employee travelling on a federal criminal investigation or prosecution.", "now": "Renamed oneYearRuleAndItsOnlyException and restated to what irs.gov actually says. Publication 463 does not quote the statute, so the statutory attribution was unsourced; Tax Topic 511 states plainly that any work assignment in excess of one year is considered indefinite, which carries the same point. The carve out now also covers providing support services for the investigation or prosecution, which Publication 463 lists and the collector dropped." }, { "field": "rules[feieTaxHomeBorrowsTheTravelDefinition]", "was": "Asserted the first sentence of IRC 911(d)(3), that the code defines tax home by reference to section 162(a)(2), sourced to the Form 2555 instructions.", "now": "Renamed feieDefinitionMatchesTravelPlusAbode and restated as a comparison of two IRS documents. The Form 2555 instructions never quote the code or mention section 162(a)(2), so that pinpoint citation was written from memory rather than read. The observable point, that the exclusion uses the same work based definition and adds the abode rule, survives intact." }, { "field": "rules[abodeRule].article", "was": "IRC 911(d)(3), second sentence.", "now": "Cited to the Form 2555 instructions and the IRS exclusion page, which both state the rule. No irs.gov document read here quotes that subsection, so the pinpoint was dropped. Also added the instructions' consequence sentence, that if your abode is in the United States you do not meet the tax home test and cannot claim the exclusion." }, { "field": "rules[feieNoRegularWorkplace].article", "was": "Instructions for Form 2555 (2025), Tax home test, for the whole rule.", "now": "Split the attribution. The word itinerant does not appear anywhere in the Form 2555 instructions. The itinerant sentence comes from the IRS exclusion page, and the source URL was changed to match." }, { "field": "rules[feieTemporaryVersusIndefiniteAbroad].statement", "was": "expect the work in one location to last 1 year or less and it is temporary unless the facts say otherwise", "now": "Restored the second half of the IRS condition: the employment must be expected to last, and does last, for 1 year or less. Dropping the second half would have told a reader that expectation alone settles it." }, { "field": "rules[mainPlaceOfBusiness].statement", "was": "Listed the three factors as if they carry equal weight.", "now": "Added the IRS statement in Tax Topic 511 that the most important consideration is the length of time you spend at each location, and moved the source to that page." }, { "field": "rules[abodeCombatZoneException].statement", "was": "an area the President has designated as a combat zone under section 112 ... It is the only exception to the abode rule.", "now": "Added by Executive order, which the Form 2555 instructions specify, and the IRS combat zone list page. Softened only exception to the exception the IRS states, since that is what the sources support." }, { "field": "gotchas, automatic filing extension", "was": "The automatic extension to June 15 needs both your tax home and your abode to be outside the United States and Puerto Rico on the regular due date. Meeting one of the two is not enough.", "now": "Rewritten. Publication 54 chapter 1 sets out two independent routes to the automatic 2-month extension, the second being military or naval service on duty outside the United States and Puerto Rico. The collector took the tax home and abode phrasing from the publication's FAQ and from its Form 2350 discussion and presented it as the only test, which would have told a service member they did not qualify when they do." }, { "field": "forms[2106].purpose", "was": "No other employee may use it.", "now": "Added the effective date Publication 463 gives: for tax years beginning after 2017." }, { "field": "forms[2350].purpose", "was": "Asks for extra time to file when you expect to qualify for the exclusion, and so to establish a foreign tax home, only after your return would normally be due.", "now": "Restated to the Form 2555 instructions' own framing, that it applies for a special extension when you will not have met the physical presence or bona fide residence test by the due date, and must be filed before the return is due. The collector's version implied the form is about establishing a tax home, which is not what either document says." }, { "field": "gotchas, added", "was": "Nothing on where offshore work sits geographically.", "now": "Added the IRS definitions that territorial waters means within 12 nautical miles of the foreign country and that foreign country excludes international waters, airspace, and offshore installations outside any foreign country's territorial waters. This is the other half of why the rotational worker example bites." }, { "field": "rules[feieExpectationCanChangeMidAssignment].statement", "was": "Your tax home moves abroad from that point, not retroactively.", "now": "Restated to what the sources show rather than asserting the conclusion. Tax Topic 511 and Publication 463 Example 3 both apply the changed expectation from the date it changes forward, with earlier months unaffected, and the statement now says that is where the treatment comes from." } ], "reviewNotes": [ { "question": "Does this topic carry any inflation-adjusted amount that could go stale, given taxYear is 2026 and the documents read are 2025 editions?", "resolution": "No. Resolved with no effect on a published field. The tax home rules carry no dollar figures at all, so amounts is empty and the taxYear field has nothing to date. The only numbers in the record are the 1-year line, which is a rule and not an inflation adjustment.", "evidence": "Every rule in this record has either a null number or the number 1 with unit years. The exclusion amount, which is the figure that moves annually, belongs to the feie topic, not this one. The Instructions for Form 2555 (2025) What's New lists the exclusion increase to $130,000 for 2025 as its only amount change and says nothing about tax home." }, { "question": "Are the documents read the newest the IRS has published, and should the wording be rechecked when 2026 revisions appear?", "resolution": "Confirmed and closed. As of 2026-09-15 the live files at irs.gov are Publication 463 for use in preparing 2025 Returns, Instructions for Form 2555 (2025), and Publication 54 (Rev. December 2025), which is now a continuous use revision rather than an annual one. There is no 2026 revision of Publication 463 or of the Form 2555 instructions to read. This is a maintenance note, not an unsettled question, and it belongs in the freshness tracker rather than in openQuestions.", "evidence": "Downloaded https://www.irs.gov/pub/irs-pdf/p463.pdf, https://www.irs.gov/pub/irs-pdf/i2555.pdf and https://www.irs.gov/pub/irs-pdf/p54.pdf on 2026-09-15. The cover of p463 reads For use in preparing 2025 Returns, i2555 is headed 2025, and p54 reads Rev. December 2025 and states it was converted from an annual revision to a continuous use revision." }, { "question": "Did P.L. 119-21, the One Big Beautiful Bill Act, change anything in the tax home rules?", "resolution": "Nothing published here depends on it, and no IRS document read reports such a change. The collector's assertion that sections 911(d)(3) and 162(a)(2) were not amended could not be checked against a primary source on irs.gov, so it is not carried into any published field. What can be shown is the negative: the two publications that would have to report a change do not.", "evidence": "Publication 463 (2025) What's New lists only Code section 168(k) depreciation changes from P.L. 119-21 and the standard mileage rate. The Instructions for Form 2555 (2025) What's New lists only the exclusion amount and the Windfall Elimination Provision repeal. Neither mentions tax home, abode, or the 1-year rule." }, { "question": "Is the collector's claim true that Publication 54 (Rev. December 2025) dropped the abode rule entirely?", "resolution": "True, and worth stating on the page as a caution about the IRS's own guide. Publication 54 reduces tax home to one sentence under Requirements and links out for the detail. It never states the abode rule as a condition of the exclusion. The only three places the word abode appears in the publication are about the filing extension and the Form 2350 extension, not about qualifying.", "evidence": "Searched the full text of https://www.irs.gov/pub/irs-pdf/p54.pdf for abode. Three hits, all in chapter 1 filing information or the FAQ, all phrased as your tax home and your abode being outside the United States and Puerto Rico for extension purposes. The tax home requirement itself reads: Tax home. You must have a tax home in a foreign country (or countries). Generally, your tax home is your principal place of business, employment, or post of duty, regardless of where you maintain your family home. For more details on the concept of tax home, see IRS.gov/FEIE-TaxHome." }, { "question": "Is the shortcut IRS.gov/FEIE-TaxHome printed in Publication 54 case sensitive, as the collector reported?", "resolution": "No. The collector was wrong and the claim was removed. Both the capitalized form printed in the publication and the lowercase form resolve to the same page.", "evidence": "Requested both https://www.irs.gov/FEIE-TaxHome and https://www.irs.gov/feie-taxhome on 2026-09-15. Both returned HTTP 200 and both redirected to https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-tax-home-in-foreign-country." }, { "question": "Does satisfying none of the three factors, rather than exactly one, also make someone an itinerant?", "resolution": "Yes, and the rule now says so with the source's own hedge. Publication 463 states the consequence for one factor and demonstrates the zero factor case in a worked example rather than in the rule text, so the rule now cites both.", "evidence": "Publication 463 (2025), chapter 1: If you satisfy only one factor, you are an itinerant. Example 2 in the same section, the outside salesperson with a room in a sister's house, concludes: You don't satisfy any of the three factors listed earlier. You are an itinerant and have no tax home." }, { "question": "Where does the one year expectation get tested, and what happens when it changes part way through?", "resolution": "Settled on primary sources and unchanged in substance from the collection, with the statement tightened. The expectation is fixed when you start the work, and a later change applies from the date of the change forward, not back to the start.", "evidence": "Publication 463 (2025): You must determine whether your assignment is temporary or indefinite when you start work. Example 3 in the same chapter, a job expected to last 9 months and extended after 8 months to 15, allows travel expenses for the first 8 months only. Tax Topic 511 states that travel expenses become nondeductible when your expectation changes. The IRS exclusion page states that employment expected to last 1 year or less stays temporary, absent facts and circumstances indicating otherwise, until your expectation changes." }, { "question": "Is the combat zone exception correctly stated, and is it really the only exception?", "resolution": "Correctly stated once the Executive order wording is added, and it is the only exception the sources state. Both the IRS page and the Form 2555 instructions present it as the sole unless clause on the abode rule.", "evidence": "Instructions for Form 2555 (2025): 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. The same section adds: Otherwise, if your abode is in the United States, you will not meet the tax home test. The IRS exclusion page supplies the effective date, tax years beginning after December 31, 2017." }, { "question": "Does the Form 2555 instructions' tax home definition match the travel expense definition in Publication 463?", "resolution": "Substantially, with one wording difference the page should absorb. Both are work based and both disregard the family home. Publication 463 adds that the tax home includes the entire city or general area, which the Form 2555 instructions do not say but the IRS exclusion web page does, calling it the general area of your main place of business.", "evidence": "Publication 463 (2025): Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located. Instructions for Form 2555 (2025): Your tax home is your regular or principal place of business, employment, or post of duty, regardless of where you maintain your family residence." } ] }, "substantial-presence": { "taxYear": 2026, "amounts": [], "rules": [ { "key": "currentYearMinDays", "statement": "The first half of the test. You must be physically present in the United States on at least 31 days during the current calendar year. Fail this and the test is over, no matter how many days you were here in the two prior years.", "number": 31, "unit": "days", "article": "IRC 7701(b)(3)(A)(i)", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "threeYearDays", "statement": "The second half of the test. Add all your days in the current year, plus one third of your days in the year before, plus one sixth of your days in the year before that. If the weighted total equals or exceeds 183 days, and you also had 31 days in the current year, you meet the test.", "number": 183, "unit": "days", "article": "IRC 7701(b)(3)(A)(ii)", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "weightingMultipliers", "statement": "The three multipliers that build the 183 day total. A day in the current year counts as a full day, a day in the first preceding year counts as one third of a day, and a day in the second preceding year counts as one sixth of a day. These are multipliers fixed by statute, not percentages and not rounded.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(A)(ii), applicable multiplier table", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "unitedStatesDefined", "statement": "For this test the United States means the 50 states and the District of Columbia, the territorial waters, and the seabed and subsoil of adjacent submarine areas the US has exclusive rights to exploit. It does not include US territories or US airspace, so flying over does not create a day.", "number": null, "unit": null, "article": "Pub. 519 (2025), chapter 1, Substantial Presence Test", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "dayOfPresenceDefined", "statement": "You are treated as present on any day you are physically in the country at any time during that day. A few minutes counts as a whole day unless one of the exceptions below applies.", "number": null, "unit": null, "article": "IRC 7701(b)(7)(A)", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "excludedCommuters", "statement": "Days you commute to work in the US from a residence in Canada or Mexico do not count, if you commute regularly. Regularly means on more than 75 percent of the workdays in your working period, and commute means travelling to work and back home inside a 24 hour period. Workdays are the days you work in the United States or in Canada or Mexico, so days worked at home sit in the denominator and pull the percentage down.", "number": 75, "unit": "percent", "article": "IRC 7701(b)(7)(B); Reg. 301.7701(b)-3(e) for the 75 percent test; Pub. 519 (2025), Regular commuters from Canada or Mexico", "source": "https://www.irs.gov/publications/p519" }, { "key": "excludedTransit", "statement": "Days you are in the US for less than 24 hours while in transit between two places outside the US do not count. Changing planes counts as transit. Attending a business meeting does not, even if the meeting is held inside the airport.", "number": null, "unit": null, "article": "IRC 7701(b)(7)(C); Reg. 301.7701(b)-3(d); Pub. 519 (2025), Days in transit", "source": "https://www.irs.gov/publications/p519" }, { "key": "excludedCrewMembers", "statement": "Days you are temporarily in the US as a regular crew member of a foreign vessel engaged in transport between the US and a foreign country or a US territory do not count. The exception is lost for any day you otherwise carry on a trade or business in the US.", "number": null, "unit": null, "article": "IRC 7701(b)(7)(D); Pub. 519 (2025), Crew members", "source": "https://www.irs.gov/publications/p519" }, { "key": "excludedMedicalCondition", "statement": "Days you intended to leave but could not, because of a medical condition or problem that arose while you were in the US, do not count. It must have arisen here: a condition that existed before you arrived and that you knew about never qualifies, and neither does returning to the US for treatment of a condition from an earlier stay, or staying on past a reasonable period once you were able to leave. Whether you intended to leave on a particular day is decided on all the facts and circumstances.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(D)(ii); Reg. 301.7701(b)-3(c); Pub. 519 (2025), Medical condition", "source": "https://www.irs.gov/publications/p519" }, { "key": "excludedExemptIndividual", "statement": "Days you are an exempt individual do not count. Exempt individual does not mean exempt from US tax. It means you fall into one of four categories: a foreign government related individual on an A or G visa, a teacher or trainee on a J or Q visa, a student on an F, J, M or Q visa, or a professional athlete competing in a charitable sports event.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(D)(i) and 7701(b)(5)", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "excludedNatoVisa", "statement": "Days you are in the US under a NATO visa as a member of a force or civilian component do not count. A dependent family member present on a NATO visa gets no exception and must count every day.", "number": null, "unit": null, "article": "Pub. 519 (2025), chapter 1, Days of Presence in the United States; Instructions for Form 8843 (2025), Days of presence in the United States, item 5", "source": "https://www.irs.gov/publications/p519" }, { "key": "exemptForeignGovernmentRelated", "statement": "An individual temporarily present on an A or G visa, other than A-3 or G-5, is a foreign government related individual and none of their days count. The category covers a full time employee of an international organization, someone present by reason of diplomatic status, and someone on a visa the Treasury treats as full time diplomatic or consular status, so long as the visa does not itself grant lawful permanent residence. There is no year limit, and the amount of time actually spent here does not change it.", "number": null, "unit": null, "article": "IRC 7701(b)(5)(B); Reg. 301.7701(b)-3(b)(2); Pub. 519 (2025), Foreign government-related individuals", "source": "https://www.irs.gov/publications/p519" }, { "key": "exemptHouseholdStaffException", "statement": "A personal employee, attendant or domestic worker present on an A-3 or G-5 visa is not a foreign government related individual and must count every day of presence.", "number": null, "unit": null, "article": "Pub. 519 (2025), Household staff exception", "source": "https://www.irs.gov/publications/p519" }, { "key": "exemptImmediateFamily", "statement": "Immediate family of an exempt individual are exempt individuals themselves, in the foreign government related, teacher and trainee, and student categories alike. Immediate family means the spouse and unmarried children whose visa status derives from and depends on the exempt individual's, and unmarried children count only if they are under 21, live regularly in the household, and are not members of another household. Attendants, servants and personal employees are never immediate family.", "number": 21, "unit": "years", "article": "Reg. 301.7701(b)-3(b)(8); Pub. 519 (2025), Foreign government-related individuals, Teachers and trainees, Students", "source": "https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student" }, { "key": "exemptTeacherTraineeYearLimit", "statement": "A teacher or trainee on a J or Q visa is not an exempt individual for the current year if they were exempt as a teacher, trainee or student for any part of 2 of the 6 preceding calendar years. Relief exists, and it needs all four of these: they were exempt for 3 or fewer of the 6 preceding years, a foreign employer paid all their compensation this year, they were present as a teacher or trainee in any of the 6 prior years, and a foreign employer paid all their compensation in each of those prior years they were here as a teacher or trainee.", "number": 2, "unit": "years", "article": "IRC 7701(b)(5)(E)(i); Reg. 301.7701(b)-3(b)(7)(i) and (ii); Pub. 519 (2025), Teachers and trainees", "source": "https://www.irs.gov/publications/p519" }, { "key": "exemptStudentYearLimit", "statement": "A student on an F, J, M or Q visa is not an exempt individual if they have been exempt as a teacher, trainee or student for any part of more than 5 calendar years. Unlike the teacher rule, which looks back only 6 years, the student rule names no lookback period at all, so exempt years from any earlier stay still count, and years exempt as a teacher or trainee count toward the 5. They can keep the exemption past 5 years only by establishing both that they do not intend to reside permanently in the US and that they have substantially complied with their visa.", "number": 5, "unit": "years", "article": "IRC 7701(b)(5)(E)(ii); Reg. 301.7701(b)-3(b)(7)(iii); Pub. 519 (2025), Students", "source": "https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student" }, { "key": "exemptProfessionalAthlete", "statement": "A professional athlete temporarily in the US to compete in a charitable sports event can exclude only the days they actually competed. Days spent practising, doing promotional work, or travelling between events all count. The event must mainly benefit a qualified charity, send all net proceeds to it, and use volunteers for substantially all the work.", "number": null, "unit": null, "article": "IRC 7701(b)(5)(A)(iv); Reg. 301.7701(b)-3(b)(5) for the days actually competed limit; Pub. 519 (2025), Professional athletes", "source": "https://www.irs.gov/publications/p519" }, { "key": "form8843Required", "statement": "If you exclude days as a teacher or trainee, as a student, as a professional athlete at a charitable sports event, or because a medical condition kept you here, you must file a fully completed Form 8843. Attach it to your income tax return, or if you do not have to file a return, mail it on its own to the IRS service center in Austin, Texas by the Form 1040-NR due date. Someone present on an A or G visa other than A-3 or G-5 is an exempt individual but is not required to file Form 8843.", "number": null, "unit": null, "article": "Pub. 519 (2025), Form 8843; Instructions for Form 8843 (2025), Who Must File, When and Where To File", "source": "https://www.irs.gov/pub/irs-pdf/f8843.pdf" }, { "key": "form8843LateFilingPenalty", "statement": "If you were required to file Form 8843 and did not file it on time, you cannot exclude the days you were present as a professional athlete or because of a medical condition that arose while you were in the US. Publication 519 and the Form 8843 instructions both limit the penalty to those two categories. You are not penalized if you can show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirement and significant steps to comply with it.", "number": null, "unit": null, "article": "Reg. 301.7701(b)-8(d); Pub. 519 (2025), Form 8843; Instructions for Form 8843 (2025), Penalty for Not Filing Form 8843", "source": "https://www.irs.gov/publications/p519" }, { "key": "consequenceOfMeetingTest", "statement": "Meet the test and you are a US resident for tax purposes for that calendar year, and in your first year of residency from your residency starting date onward. Your worldwide income is subject to US income tax the same way a citizen's is, at the same graduated rates, reported on Form 1040 with the same filing statuses and deductions.", "number": null, "unit": null, "article": "IRC 7701(b)(1)(A)(ii); Pub. 519 (2025), chapter 4, Resident Aliens", "source": "https://www.irs.gov/individuals/international-taxpayers/resident-aliens" }, { "key": "residencyStartingDate", "statement": "If you meet the test for a calendar year and were not a US resident at any time in the year before, your residency starts on the first day you were present in the US during that year, and you are a nonresident for the part of the year before that date.", "number": null, "unit": null, "article": "IRC 7701(b)(2)(A)(i) and (iii); Pub. 519 (2025), Residency starting date under substantial presence test", "source": "https://www.irs.gov/publications/p519" }, { "key": "residencyStartingDateBothTests", "statement": "If you meet both the substantial presence test and the green card test, residency starts on the earlier of the first day present under the substantial presence test and the first day present as a lawful permanent resident.", "number": null, "unit": null, "article": "Pub. 519 (2025), Residency starting date under green card test", "source": "https://www.irs.gov/publications/p519" }, { "key": "residencyPrecedingYearCarryover", "statement": "If you were a US resident during any part of the preceding calendar year and are a resident for any part of the current year, you are treated as a resident from January 1 of the current year. There is no fresh start date in that situation.", "number": null, "unit": null, "article": "Pub. 519 (2025), Residency during the preceding year", "source": "https://www.irs.gov/publications/p519" }, { "key": "residencyEndingDate", "statement": "If you were a US resident this year but are not a resident during any part of next year, residency ends on December 31 unless you qualify for an earlier date. The earlier date, where you met the substantial presence test, is the last day you were physically present in the US.", "number": null, "unit": null, "article": "IRC 7701(b)(2)(B); Pub. 519 (2025), Last Year of Residency", "source": "https://www.irs.gov/publications/p519" }, { "key": "residencyEndingDateConditions", "statement": "The earlier termination date is available only if, for the rest of the year, your tax home was in a foreign country and you had a closer connection to that country than to the US, and you are not a US resident at any time in the following year. You must file a signed statement under penalties of perjury to establish the date.", "number": null, "unit": null, "article": "IRC 7701(b)(2)(B)(ii) and (iii); Pub. 519 (2025), Statement required to establish your residency termination date", "source": "https://www.irs.gov/publications/p519" }, { "key": "residencyNextYearCarryover", "statement": "If you are a US resident during any part of next year and a resident during any part of this year, you are treated as a resident through the end of this year, whatever your closer connection was.", "number": null, "unit": null, "article": "Pub. 519 (2025), Residency during the next year", "source": "https://www.irs.gov/publications/p519" }, { "key": "deMinimisPresence", "statement": "Up to 10 days of actual presence can be disregarded when fixing your residency starting date or your residency termination date, for days in a period where you had a closer connection to a foreign country and your tax home was there. The 10 days can be spread across more than one period, but a period counts only if every day in it can be excluded. Claiming it at the start of residency requires a signed statement filed by the Form 1040-NR due date.", "number": 10, "unit": "days", "article": "IRC 7701(b)(2)(C); Pub. 519 (2025), De minimis presence", "source": "https://www.irs.gov/publications/p519" }, { "key": "deMinimisNotForTheTestItself", "statement": "The 10 de minimis days move your residency start or end date only. Pub. 519 states twice that you must still include those days when working out whether you meet the substantial presence test.", "number": 10, "unit": "days", "article": "IRC 7701(b)(2)(C), which applies only to the residency date rules; Pub. 519 (2025), Residency starting date and De minimis presence", "source": "https://www.irs.gov/publications/p519" } ], "forms": [ { "form": "8843", "purpose": "Statement for Exempt Individuals and Individuals With a Medical Condition: the form that explains why you are excluding days of presence, required for teacher and trainee days, student days, charitable sports event days and medical days.", "source": "https://www.irs.gov/forms-pubs/about-form-8843" }, { "form": "1040", "purpose": "The return you file once you meet the test, because you are then taxed as a US resident on worldwide income.", "source": "https://www.irs.gov/individuals/international-taxpayers/resident-aliens" }, { "form": "1040-NR", "purpose": "The nonresident return, and the form whose due date sets the deadline for a standalone Form 8843 and for the residency start and end date statements.", "source": "https://www.irs.gov/pub/irs-pdf/f8843.pdf" }, { "form": "8840", "purpose": "Closer Connection Exception Statement for Aliens: the separate claim that keeps you a nonresident even though you met the substantial presence test. Form 8843 does not make that claim.", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" } ], "gotchas": [ { "statement": "The 183 is a weighted three-year total, not days in one year. You can be under 183 days in the current year, every year, and still meet the test: 122 days a year for three running years weights to exactly 183, and the statute says equals or exceeds. This is the single most common misreading of the rule.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "The 31 day requirement is a separate gate, not a lower alternative. The IRS worked example of 120 days in each of three years fails the test at 180 weighted days even though the 31 days is easily met, and both conditions must hold in the same year.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "A day is any day you were physically in the US at any time during that day. Landing at 11pm and leaving the next morning is two days, not one, unless the under 24 hour transit exception applies.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "Exempt individual does not mean exempt from US tax. It means the day does not count toward the presence total. An exempt individual can still owe US tax on US source income.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "statement": "The student and teacher exemptions run out. A teacher or trainee loses it once they were exempt for any part of 2 of the 6 preceding calendar years, and a student loses it after more than 5 calendar years. Students often cross the test in year six without noticing that their days started counting.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "The 5 year student limit counts calendar years, not 12 month periods, and any part of a year counts as a whole year. Arriving in December burns a full year. It also has no lookback window, so exempt years from an earlier stay, and years exempt as a teacher or trainee, still count toward the 5.", "source": "https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student" }, { "statement": "An F-2 or J-2 dependent is an exempt individual in their own right. The spouse and the under 21 unmarried children of an exempt student, teacher or trainee are covered when their visa status derives from the exempt individual's, so their days do not count either.", "source": "https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student" }, { "statement": "An A-3 or G-5 visa holder is not a foreign government related individual. Domestic staff of a diplomat count every single day, while the diplomat counts none.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "The medical exception only covers a condition that arose while you were in the US. A flare-up of something you already had and knew about before you arrived does not exclude a single day, and neither does coming back for treatment of a condition from an earlier trip.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "The late filing penalty for Form 8843 is narrower than the IRS website suggests. Publication 519 and the Form 8843 instructions both say a late form costs you only the professional athlete days and the medical condition days. The IRS substantial presence test web page states it more broadly, as exempt individual days generally. File on time either way, because the form is required whichever reading is right.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "Meeting the test is not the end of the road. The closer connection exception can still keep you a nonresident if you were present fewer than 183 days in the current year, had a tax home abroad and a closer connection to that country, but it is claimed on Form 8840, a different form from the 8843.", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" }, { "statement": "The de minimis 10 days is not a free allowance against the test. It moves your residency start or end date only, and Pub. 519 says plainly that those same days must still be included when you check whether you meet the substantial presence test.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "Residency does not restart each January. If you were a US resident during any part of the previous calendar year and are a resident for any part of this one, you are treated as a resident from January 1, so a mid-year arrival gets no partial year.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "The regular commuter exception has a threshold most readers miss. Commuting from Canada or Mexico excludes days only if you commute on more than 75 percent of the workdays in your working period, and only where the round trip fits inside 24 hours.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "Being in transit is narrow. Changing planes on the way to a foreign destination is transit, but attending a business meeting is not, even if the meeting is inside the airport terminal, and that turns the stopover into a counted day.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "A charitable event athlete excludes only days actually competed. Practice days, promotional appearances and travel between events all count toward the test.", "source": "https://www.irs.gov/publications/p519" }, { "statement": "US territories and US airspace are outside the definition of the United States for this test, so a day in Puerto Rico or Guam, or a flight passing overhead, is not a day of presence.", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" } ], "confidence": "P", "openQuestions": null, "corrections": [ { "field": "rules.form8843LateFilingPenalty.statement", "was": "File Form 8843 late and you lose the exclusion for those days, which can make you a US resident under the test, stated broadly enough to cover exempt individual days generally, so a student or teacher who filed late would read it as losing their exemption.", "now": "A late Form 8843 costs you the professional athlete days and the medical condition days only. Reg. 301.7701(b)-8(d)(1) applies the penalty to the statements required under paragraphs (a)(1), (a)(2)(ii), (a)(2)(iii) and (a)(3), and recomputes days without the benefit of Reg. 301.7701(b)-3(b)(5), 301.7701(b)-3(c) and 301.7701(b)-4(c)(1). It deliberately leaves out paragraph (a)(2)(i), which is the teacher, trainee and student statement. Pub. 519 and the Form 8843 instructions both track the regulation word for word. The IRS web page is the outlier, and the collector published the web page's broader wording." }, { "field": "rules.form8843LateFilingPenalty.statement", "was": "The only way out is showing by clear and convincing evidence that you took reasonable actions to learn the filing requirement and significant steps to comply.", "now": "You are not penalized if you can show that by clear and convincing evidence. Dropped the word only, because Reg. 301.7701(b)-8(e) also lets the Secretary disregard a late statement at their sole discretion, so only overstated the source." }, { "field": "rules.form8843Required.statement", "was": "If you exclude days because you were an exempt individual or because a medical condition kept you here, you must file a fully completed Form 8843.", "now": "The requirement covers teacher and trainee days, student days, professional athlete days and medical days. A foreign government related individual on an A or G visa other than A-3 or G-5 is an exempt individual but is not required to file Form 8843: the Form 8843 instructions say so in terms, Pub. 519's list of who must file omits the category, and Reg. 301.7701(b)-8(a)(2) does not reach it." }, { "field": "rules.exemptStudentYearLimit.statement", "was": "Exempt as a teacher, trainee or student for any part of more than 5 calendar years, with nothing said about how far back the count reaches.", "now": "Adds that the student rule names no lookback period, unlike the teacher rule's 6 preceding calendar years, so exempt years from any earlier stay still count and years exempt as a teacher or trainee count toward the 5. Also states that both conditions must be met to keep the exemption past 5 years, not one." }, { "field": "rules.exemptImmediateFamily", "was": "Missing. The immediate family rule appeared only inside exemptForeignGovernmentRelated, so a page built from this record would tell an F-2 or J-2 dependent nothing.", "now": "Added as its own rule. Pub. 519 says immediate family members are also included under Teachers and trainees and under Students, and Reg. 301.7701(b)-3(b)(3) and (b)(4) define both categories as including the individual's immediate family. A matching gotcha was added." }, { "field": "rules.exemptForeignGovernmentRelated.statement", "was": "Defined the category by the A or G visa alone, and carried the immediate family definition.", "now": "Adds the substantive definition Pub. 519 and Reg. 301.7701(b)-3(b)(2) give, a full time employee of an international organization, diplomatic status, or a visa Treasury treats as full time diplomatic or consular status that does not itself grant lawful permanent residence. Immediate family moved to its own rule." }, { "field": "rules.excludedCommuters", "was": "Article cited IRC 7701(b)(7)(B) for the 75 percent test. The statute says only regularly commutes; the 75 percent figure is the regulation's.", "now": "Article now names Reg. 301.7701(b)-3(e) as the source of the 75 percent test. The statement also adds that workdays means days worked in the United States or in Canada or Mexico, which is the denominator readers get wrong." }, { "field": "rules.exemptProfessionalAthlete.article", "was": "IRC 7701(b)(5)(A)(iv); Pub. 519 (2025), Professional athletes", "now": "Adds Reg. 301.7701(b)-3(b)(5), which is where the days actually competed limit comes from. The statute defines the category but does not restrict the exclusion to competition days." }, { "field": "rules.excludedNatoVisa.article", "was": "Instructions for Form 8843 (2025), item 5", "now": "Instructions for Form 8843 (2025), Days of presence in the United States, item 5. Item 5 is the fifth bullet of the excluded days list, not line 5 of the form, which is a teacher question." }, { "field": "rules.threeYearDays.statement", "was": "If the weighted total reaches 183 days", "now": "If the weighted total equals or exceeds 183 days, which is the statute's phrasing and settles the boundary case of exactly 183." }, { "field": "rules.consequenceOfMeetingTest.statement", "was": "Meet the test and you are a US resident for tax purposes for that calendar year.", "now": "Adds that in a first year of residency you are a resident only from the residency starting date, so the year is split. As written the rule contradicted residencyStartingDate." }, { "field": "rules.deMinimisNotForTheTestItself.article", "was": "Pub. 519 (2025), Residency starting date and De minimis presence", "now": "Adds IRC 7701(b)(2)(C), noting that the statute applies the 10 day rule only for purposes of subparagraphs (A)(iii) and (B), the residency date rules, and not to paragraph (3), the test itself. The statute is why Pub. 519 says it twice." }, { "field": "gotchas", "was": "Filing Form 8843 late loses the exclusion, stated broadly.", "now": "Rewritten to the narrower rule, naming the divergence with the IRS web page and still telling the reader to file on time. A gotcha about exempt dependants was added and the student 5 year gotcha now says the count has no lookback window." } ], "reviewNotes": [ { "question": "Are the 31 days, the weighted 183 days and the 1/3 and 1/6 multipliers right, and does 183 exactly meet the test?", "resolution": "Confirmed, unchanged. IRC 7701(b)(3)(A)(i) requires at least 31 days in the current year and (ii) requires the sum, multiplied by the table's multipliers of 1, 1/3 and 1/6, to equal or exceed 183 days. The IRS web page, Pub. 519 chapter 1 and the Form 8843 instructions all state the same three numbers. Exactly 183 meets the test, so the collector's 122 days a year example, which totals exactly 183, is right. The one wording fix was reaches to equals or exceeds.", "evidence": "26 USC 7701(b)(3)(A); https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test; Pub. 519 (2025) chapter 1; Instructions for Form 8843 (2025), Substantial Presence Test." }, { "question": "Is the collector right that the IRS web page states the Form 8843 late filing penalty more broadly than Pub. 519, and right to publish the broader version?", "resolution": "Right about the divergence, wrong about which to publish. Reg. 301.7701(b)-8(d)(1) imposes the penalty on an individual required to file under paragraphs (a)(1), (a)(2)(ii), (a)(2)(iii) or (a)(3) and recomputes presence without the benefit of Reg. 301.7701(b)-3(b)(5) (athlete), 301.7701(b)-3(c) (medical) and 301.7701(b)-4(c)(1). Paragraph (a)(2)(i), the teacher, trainee and student statement, is left out of both lists. Pub. 519 and the Form 8843 instructions both say a late form costs the athlete days and the medical days only. The IRS web page's wider sentence is not supported by the regulation it implements. Under the repo's rule that the statute beats the explainer, and the house rule of never stronger than the source, the record was narrowed. This matters in the direction that hurts a reader: the broader wording would tell a student who filed late that their days now count, which could make them a US resident on worldwide income when the regulation does not.", "evidence": "Reg. 301.7701(b)-8(a), (d) and (e); Pub. 519 (2025), Form 8843 paragraph; Instructions for Form 8843 (2025), Penalty for Not Filing Form 8843; https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test." }, { "question": "Is NATO a sixth exclusion in its own right, or a subcategory of exempt individual?", "resolution": "Collector right, kept. Pub. 519 chapter 1 lists NATO force and civilian component days as their own bullet, before the exempt individual bullet, and the Form 8843 instructions list it as item 5 with exempt individuals at item 6. Reg. 301.7701(b)-3(b)(2) does not mention NATO, so it is not part of the foreign government related definition. The dependent family exception, that a family member on a NATO visa counts every day, is stated in both. Only the citation format was fixed.", "evidence": "Pub. 519 (2025), Days of Presence in the United States; Instructions for Form 8843 (2025), Days of presence in the United States, items 5 and 6; Reg. 301.7701(b)-3(b)(2)." }, { "question": "Is the teacher and trainee limit 2 of the 6 preceding calendar years, and is the relief stated correctly?", "resolution": "Confirmed. IRC 7701(b)(5)(E)(i) denies exempt status if the person was exempt as a teacher, trainee or student for any 2 of the preceding 6 calendar years, and substitutes 4 calendar years where all compensation is section 872(b)(3) compensation, which is the same thing as the Form 8843 and Pub. 519 condition of 3 or fewer of the 6 preceding years. The regulation's four conditions and Pub. 519's four bullets match. The collector's version was accurate but compressed two conditions into one clause, so it was rewritten to list all four. These are calendar years and any part of a year counts, confirmed by Reg. 301.7701(b)-3(b)(7)(v) example 4, where a December arrival burns the year.", "evidence": "26 USC 7701(b)(5)(E)(i); Reg. 301.7701(b)-3(b)(7)(i), (ii) and (v); Pub. 519 (2025), Teachers and trainees; Instructions for Form 8843 (2025), Part II Exception." }, { "question": "Is the student 5 year limit a lifetime count or a rolling window, and are they calendar years?", "resolution": "Calendar years, and effectively a lifetime count. IRC 7701(b)(5)(E)(ii) applies to any calendar year after the 5th calendar year for which the individual was an exempt individual as a teacher, trainee or student, and neither the statute, the regulation nor Pub. 519 attaches a lookback period, in deliberate contrast to the teacher rule's 6 preceding calendar years. The one boundary is Reg. 301.7701(b)-3(b)(7)(iv), which counts only exempt periods after 1984. The record now says the rule names no lookback period rather than using the word lifetime, because no IRS source uses that word.", "evidence": "26 USC 7701(b)(5)(E)(ii); Reg. 301.7701(b)-3(b)(7)(iii) and (iv); Pub. 519 (2025), Students; https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student, reviewed 06-Jul-2026." }, { "question": "Are the excluded day categories and their conditions right, in particular the 75 percent commuter test, the under 24 hour transit rule, the crew member rule and the medical condition rule?", "resolution": "All four confirmed against the regulation, which is more detailed than either IRS page. Reg. 301.7701(b)-3(e) sets the more than 75 percent of workdays test, defines commute as travel to work and back within 24 hours, and defines workdays as days worked in the United States or Canada or Mexico, which the record now states. Reg. 301.7701(b)-3(d) confirms that changing planes is transit and a business meeting is not, airport or otherwise. IRC 7701(b)(7)(D) confirms the crew member rule including the trade or business carve out. Reg. 301.7701(b)-3(c) confirms all three medical disqualifiers the collector listed and adds the facts and circumstances test for intent to leave, now included.", "evidence": "26 USC 7701(b)(7)(B), (C), (D); Reg. 301.7701(b)-3(c), (d) and (e); Pub. 519 (2025), Regular commuters from Canada or Mexico, Days in transit, Crew members, Medical condition." }, { "question": "Does the record miss anything material about who is an exempt individual?", "resolution": "Yes, immediate family. Reg. 301.7701(b)-3(b)(3) and (b)(4) define teacher or trainee and student as including that individual's immediate family, and Pub. 519 repeats it under both headings. The collector carried the immediate family definition only under the foreign government related category, so the record as collected would have told an F-2 spouse or a J-2 child nothing. Added as rule exemptImmediateFamily with a matching gotcha.", "evidence": "Reg. 301.7701(b)-3(b)(3), (b)(4) and (b)(8); Pub. 519 (2025), Teachers and trainees, Students; https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student." }, { "question": "Are the residency start and end date rules and the 10 day de minimis rule right?", "resolution": "All confirmed, no substantive change. IRC 7701(b)(2)(A)(iii) sets the starting date at the first day present; (b)(2)(B) sets the termination date after the last day present, with the closer connection and next year conditions; (b)(2)(C) disregards not more than 10 days and, critically, does so only for purposes of subparagraphs (A)(iii) and (B), never for paragraph (3). That statutory limitation is why Pub. 519 says twice that de minimis days still count toward the test, and the article now cites it. Pub. 519 confirms the preceding year and next year carryover rules and the two worked examples, Ivan Ivanovich for the starting date and Lola Bovary for the termination date. Pub. 519 adds the tax home condition to the earlier termination date, which the statute states as a closer connection condition alone, so the record follows Pub. 519 as the more demanding reading.", "evidence": "26 USC 7701(b)(2)(A), (B) and (C); Pub. 519 (2025), First Year of Residency, Last Year of Residency, De minimis presence, Residency during the preceding year, Residency during the next year." }, { "question": "Is anything in the sources not published here that a page should carry?", "resolution": "One thing, left out on purpose. Reg. 301.7701(b)-3(f) says that a day excluded under that section is not taken into account in the current year or in the first or second preceding year either, so an excluded day stays excluded when it is later weighted at one third or one sixth. That is useful and correct, but no irs.gov source states it, and the gate requires an irs.gov URL on every rule, so it is recorded here rather than published. If a Pub. 519 revision or an IRS page ever states it, it should become a rule.", "evidence": "Reg. 301.7701(b)-3(f)." }, { "question": "Is taxYear 2026 defensible when the available Publication 519 is the 2025 revision and Form 8843 is the 2025 revision?", "resolution": "Yes. Nothing in this topic is inflation adjusted or annually reset. The 31 days, the 183 days, the 1 and 1/3 and 1/6 multipliers, the 10 de minimis days and the 2 year and 5 year exempt limits are all fixed in IRC 7701(b) and unchanged. The IRS substantial presence test page, last reviewed 14-Mar-2026, and the student exempt individual page, last reviewed 06-Jul-2026, restate the same figures in 2026, and the statute text as of this check is unchanged. The dated Publication revision affects the worked examples' years, not the rules.", "evidence": "26 USC 7701(b) current text; https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test reviewed 14-Mar-2026; https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student reviewed 06-Jul-2026." }, { "question": "Does this record agree with data/tax-treaties.json shared.substantialPresenceTest, which the treaty pages already publish?", "resolution": "Yes on every figure. That block carries 31, 183, 1/3 and 1/6, and so does this record, independently re-read from the statute and the IRS page. Its prose summary lists five excluded day categories and omits NATO, and it does not mention that the exempt teacher and student categories expire or that A-3 and G-5 holders are excluded from the A and G exemption. Those are gaps in a summary, not disagreements, and the gate only cross-checks the two numbers. Worth noting for whoever next edits that block.", "evidence": "data/tax-treaties.json shared.substantialPresenceTest; scripts/verify-expat-residency.js cross-dataset check." } ], "note": "No figure in this topic is inflation adjusted or annually reset: 31 days, 183 days, the 1/3 and 1/6 multipliers, the 10 de minimis days and the 2 and 5 year exempt individual limits are all fixed in IRC 7701(b) and unchanged for tax year 2026. The available Pub. 519 revision is the 2025 edition and Form 8843 is the 2025 revision, which is why every rule here is checked against the statute, against Reg. 301.7701(b)-3 and 301.7701(b)-8, and against the IRS substantial presence test page (reviewed 14-Mar-2026) and student exempt individual page (reviewed 06-Jul-2026). Cross-dataset: data/tax-treaties.json shared.substantialPresenceTest publishes 31, 183, 1/3 and 1/6, and this record agrees with all four. The one real source conflict is the Form 8843 late filing penalty. The IRS substantial presence test web page says a late form costs you the exclusion for exempt individual days generally; Pub. 519, the Form 8843 instructions and Reg. 301.7701(b)-8(d)(1) all limit it to professional athlete days and medical condition days, and the regulation pointedly omits the teacher, trainee and student statement from the paragraphs it penalises. The collector published the web page's broader wording; this record publishes the narrower rule the regulation and both IRS documents support, because the broader version would wrongly tell a student who filed late that their days now count. What a page built from this record should carry that the IRS web page leaves out: the 31 days and the 183 days are separate conditions that must both be met, the A or G exemption excludes A-3 and G-5 holders, the exempt teacher and student categories expire, dependants of exempt students and teachers are themselves exempt, and NATO days are a sixth exclusion." }, "closer-connection": { "taxYear": 2026, "amounts": [], "rules": [ { "key": "exceptionOverview", "statement": "The closer connection exception lets an alien individual who meets the substantial presence test be treated as a nonresident alien for the year anyway. It is US domestic law, written into IRC 7701(b)(3)(B) and the section 7701(b) regulations, and it is claimed by filing Form 8840.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(B); Treas. Reg. 301.7701(b)-2(a)", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" }, { "key": "conditionDaysUnder183", "statement": "First condition: you were present in the United States for fewer than 183 days in the current year. This is a count for that one year alone, not the weighted three year total the substantial presence test uses. Fewer than 183 means 183 days ends the exception, and Form 8840 says outright that you are not eligible if you were present 183 days or more in the calendar year.", "number": 183, "unit": "days", "article": "IRC 7701(b)(3)(B)(i); Treas. Reg. 301.7701(b)-2(a)(1)", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "daysCountedAfterExclusions", "statement": "The days counted for that 183 day condition are days of presence as section 7701(b) defines them, which means the days excluded for the substantial presence test are excluded here too. IRC 7701(b)(7) says that for purposes of the whole of subsection (b), a regular commuter from Canada or Mexico, a person in transit between two foreign points for under 24 hours, and a crew member of a foreign vessel are not treated as present. IRC 7701(b)(3)(D) says the same for an exempt individual and for a person unable to leave because of a medical condition that arose in the United States. The regulation is explicit that its exclusions apply for purposes of section 7701(b) and the regulations under that section, which is where the closer connection exception lives.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(D) and 7701(b)(7); Treas. Reg. 301.7701(b)-3(a)", "source": "https://www.ecfr.gov/current/title-26/section-301.7701(b)-3" }, { "key": "conditionTaxHomeAbroad", "statement": "Second condition: you maintained a tax home in a foreign country during the current year. The tax home has to be in existence for the entire current year and has to sit in the same foreign country you claim the closer connection to. The Form 8840 instructions tell you not to file the form at all if you had a tax home in the United States at any time during the year.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(a)(2) and (c)(2)", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "conditionCloserConnection", "statement": "Third condition: during the year you had a closer connection to a single foreign country in which you maintained that tax home than to the United States. The only exception to the single country requirement is the two country special rule.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(a)(3)", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "greenCardBar", "statement": "A separate bar sits outside those three conditions. You are shut out of the exception if during the year you personally applied or took other affirmative steps toward lawful permanent resident status, or had an application for adjustment of status pending. A lawful permanent resident is shut out as well, because the green card test makes you a US resident on its own and the exception only relieves against the substantial presence test.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(C); Treas. Reg. 301.7701(b)-2(f)", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "affirmativeStepsList", "statement": "The regulation names six filings as affirmative steps toward permanent residence, and says the list is not exhaustive: Form I-508 and Form I-485 filed by you, Form I-130 and Form I-140 filed on your behalf, Department of Labor Form ETA-750 filed on your behalf, and Department of State Form OF-230 filed by you.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(f)(1) through (6)", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" }, { "key": "taxHomeDefinition", "statement": "Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where your family home is. If the nature of your work gives you no regular or main place of business, your tax home is the place where you regularly live. If you have neither, you are an itinerant and your tax home is wherever you work. The regulation gives the term the same meaning it has for travel expenses under section 162(a)(2).", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(c)(1)", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "abodeRuleDoesNotApply", "statement": "The statute defines tax home here by reference to section 911(d)(3) without regard to its second sentence. That second sentence is the rule that says you do not have a foreign tax home for any period your abode is in the United States, and it is the rule that sinks many foreign earned income exclusion claims. It does not apply to the closer connection exception.", "number": null, "unit": null, "article": "IRC 7701(b)(3)(B)(ii), cross-referencing IRC 911(d)(3)", "source": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7701&num=0&edition=prelim" }, { "key": "significantContactsFactors", "statement": "Closer connection is decided on facts and circumstances: you have it if you or the IRS establishes that you maintained more significant contacts with the foreign country than with the United States. The regulation lists ten factors and says expressly that the facts considered are not limited to them: the location of your permanent home; the location of your family; the location of personal belongings such as automobiles, furniture, clothing and jewelry owned by you and your family; the location of social, political, cultural or religious organizations you have a current relationship with; where you conduct your routine personal banking; where you conduct business activities other than those that make up your tax home; the jurisdiction that issued your driver licence; the jurisdiction where you vote; the country of residence you designate on forms and documents; and the types of official forms and documents you file, such as Form 1078, Form W-8 or Form W-9.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(d)(1)(i) through (x)", "source": "https://www.ecfr.gov/current/title-26/section-301.7701(b)-2" }, { "key": "permanentHomeMeaning", "statement": "For the permanent home factor it does not matter whether the home is a house, an apartment or a furnished room, or whether you own it or rent it. What matters is that the dwelling was available to you at all times, continuously, and not solely for stays of short duration.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(d)(2)", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "twoForeignCountriesRule", "statement": "A special rule lets you show a closer connection to two foreign countries, but never more than two, if all five of these hold: you maintained a tax home beginning on the first day of the year in one foreign country; you changed your tax home during the year to a second foreign country; you kept your tax home in that second country for the rest of the year; you had a closer connection to each country than to the United States for the period you maintained a tax home there; and you were taxed as a resident under the internal laws of either country for the entire year, or as a resident of both countries for the periods you maintained a tax home in each.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-2(e)(1) through (5)", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "form8840Filing", "statement": "The exception is claimed on Form 8840, Closer Connection Exception Statement for Aliens. If you are filing Form 1040-NR, attach Form 8840 to it. If you do not have to file a return, mail Form 8840 by itself, signed, to Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215. Each alien individual files a separate Form 8840, so spouses file one each.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-8(a)(1) and (b)(1)(i); Form 8840 instructions, When and Where To File", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "form8840DueDate", "statement": "Form 8840 is due by the due date for filing Form 1040-NR, including extensions. Publication 519 gives that due date as the 15th day of the 4th month after the tax year ends if you are an employee receiving wages subject to US income tax withholding, and the 15th day of the 6th month after the tax year ends if you are not. For returns covering calendar year 2025 the IRS published those dates as April 15, 2026 and June 15, 2026.", "number": null, "unit": null, "article": "Form 8840 instructions, When and Where To File; Pub. 519 (2025) chapter 7, When To File", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "key": "lateFilingConsequence", "statement": "If you do not timely file Form 8840 you cannot claim the closer connection exception and may be treated as a US resident for the year. Two things can save a late filer. The regulation waives the penalty if you show by clear and convincing evidence that you took reasonable actions to become aware of the filing requirements and significant affirmative steps to comply with them. Separately, the regulation lets the IRS disregard a late statement at its own discretion when it decides that is in the government interest on all the facts.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-8(d)(1), (d)(2) and (e); Form 8840 instructions, Penalty for Not Filing Form 8840", "source": "https://www.ecfr.gov/current/title-26/section-301.7701(b)-8" }, { "key": "substantialPresenceTestItRelievesAgainst", "statement": "The test the exception overrides: you are a US resident for a calendar year if you were physically present in the United States on at least 31 days during that year and on at least 183 days over the three year period made up of that year and the two before it, counting all days in the current year, one third of the days in the first prior year, and one sixth of the days in the second prior year.", "number": 183, "unit": "days", "article": "IRC 7701(b)(3)(A); Form 8840 instructions, Substantial Presence Test", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "treatyTiebreakerDifference", "statement": "The closer connection exception and a treaty tie breaker are different instruments. The closer connection exception is US domestic law: if it applies you are simply not a US resident for the year, you claim it on Form 8840, and it is closed to you if you were present 183 days or more, hold a green card, or have taken steps toward one. A treaty tie breaker starts from the opposite place, where you are a resident of both countries under each country internal law, and the residence article of the treaty assigns you to one. You claim it by filing Form 1040-NR with Form 8833 attached and figuring your tax as a nonresident alien, and Publication 519 points anyone who answered Yes to the green card question on Form 8840 toward it. The consequences also differ: under a treaty tie breaker you are treated as a US resident for every purpose other than figuring your tax, so residency periods and information reporting are unaffected, and Publication 519 warns that in certain instances being treated as a nonresident under a tie breaker can trigger the section 877A expatriation tax.", "number": null, "unit": null, "article": "Pub. 519 (2025), Effect of Tax Treaties, Dual residents; Form 8840 instructions, line 6", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" } ], "forms": [ { "form": "8840", "purpose": "Closer Connection Exception Statement for Aliens, the form that claims the exception; filed with Form 1040-NR or mailed on its own to Austin, TX 73301-0215 if no return is due.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "form": "8843", "purpose": "Statement for Exempt Individuals and Individuals With a Medical Condition, required separately if you are excluding days of presence as an exempt individual or because of a medical condition that arose in the United States, and the form a foreign student uses for the separate student only closer connection exception.", "source": "https://www.irs.gov/pub/irs-pdf/f8843.pdf" }, { "form": "1040-NR", "purpose": "The nonresident alien return that Form 8840 attaches to when a return is required, and whose due date sets the Form 8840 deadline.", "source": "https://www.irs.gov/forms-pubs/about-form-1040-nr" }, { "form": "8833", "purpose": "Treaty-Based Return Position Disclosure, the form used for a treaty tie breaker rather than the closer connection exception; filed with Form 1040-NR by a dual resident taxpayer.", "source": "https://www.irs.gov/forms-pubs/about-form-8833" } ], "gotchas": [ { "statement": "The two 183 day figures are different tests. The substantial presence test uses a weighted three year total that counts one third of last year and one sixth of the year before. The closer connection exception uses days in the current year alone. A snowbird can fail the weighted test on 120 days a year yet still be comfortably under the current year 183 and qualify.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "The current year threshold is fewer than 183 days, not 183 or fewer. Form 8840 says outright that you are not eligible if you were present in the United States 183 days or more in the calendar year, so day 183 itself is the day the exception disappears.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "Excluded days are excluded from that count, but only if you do the paperwork. If you exclude days because you were an exempt individual or because a medical condition kept you here, you must file Form 8843, and Publication 519 says that if you do not file it on time you cannot exclude those days at all. Form 8840 line 5 just asks for the number of days you were present and does not repeat the exclusions, so anyone whose count only clears 183 because of excluded days should keep the records that prove it.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "The rule that abode in the United States destroys a foreign tax home does not apply here. That rule is the second sentence of section 911(d)(3), and it is a common reason a foreign earned income exclusion claim fails, but the statute defines tax home for the closer connection exception by reference to section 911(d)(3) without regard to that sentence.", "source": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7701&num=0&edition=prelim" }, { "statement": "The foreign tax home has to last the whole year and has to be in the country you claim. If you had a tax home in the United States at any time during the year, the Form 8840 instructions tell you not to file the form at all, because you are not eligible.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "Green card steps taken by somebody else still count against you. The regulation lists a Form I-130 petition for an alien relative and a Form I-140 petition for a prospective immigrant employee, both filed on your behalf rather than by you, among the affirmative steps that close the exception, alongside your own Form I-485 or Form I-508.", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" }, { "statement": "Missing the deadline forfeits the exception rather than just costing a penalty. File Form 8840 late and you cannot claim the closer connection at all, unless you can show by clear and convincing evidence that you took reasonable actions to learn the filing requirements and significant steps to comply, or the IRS uses its separate discretion to disregard the late filing.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "Filing Form 8840 is required even when no tax is owed and no return is due. It is a standalone signed statement mailed to the Austin service center by the Form 1040-NR due date, and each spouse files their own. The address printed in the 1990s regulation, Philadelphia, PA 19255, is obsolete; use the address in the current Form 8840 instructions.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "Answering Yes to Form 8840 line 6, about applying for or taking steps toward lawful permanent resident status, means you should not file the form. The instructions redirect you to a treaty position on Form 8833 with Form 1040-NR instead, which is a different claim with different consequences.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "Where an investment is held is not where the paperwork sits. The Form 8840 instructions say that for stocks and bonds you use the country of origin of the company or debtor, so shares of a US public company count as a US located investment even if the certificates sit in a safe deposit box abroad.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "Closer connection is a weighing of contacts, not a checklist you can pass on points. The regulation says the listed factors are considered but are not limited to those, and either you or the IRS can be the one to establish where the more significant contacts lie.", "source": "https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test" }, { "statement": "The exception is unavailable to a lawful permanent resident on its own terms. A green card holder is a US resident under the green card test, which is a separate test that day counting does not touch, so no amount of foreign connection helps.", "source": "https://www.irs.gov/pub/irs-pdf/f8840.pdf" }, { "statement": "There is a second, narrower closer connection exception for foreign students, and it is not this one. The IRS says most foreign students cannot use the Form 8840 exception because of the 183 day limit and the foreign tax home requirement, and directs a student who has exhausted the five year exempt individual period to the student only exception, which is claimed on Form 8843 rather than Form 8840.", "source": "https://www.irs.gov/individuals/international-taxpayers/the-closer-connection-exception-to-the-substantial-presence-test-for-foreign-students" } ], "confidence": "P", "openQuestions": null, "corrections": [ { "field": "rules.conditionDaysUnder183 and the new rule daysCountedAfterExclusions", "was": "The collector left open whether the fewer than 183 days condition counts raw calendar days of physical presence or days of presence after the Treas. Reg. 301.7701(b)-3 exclusions, and told the page not to resolve it.", "now": "Settled from the statute and the regulation: the exclusions apply. The count is days of presence as section 7701(b) defines them, so commuter, transit, crew, medical and exempt individual days do not count toward the 183. Recorded as its own rule, with the Form 8843 filing condition recorded as a gotcha." }, { "field": "rules.significantContactsFactors (source)", "was": "The ten regulation factors were cited to the IRS closer connection web page.", "now": "Cited to the regulation text at eCFR. The IRS web page does not carry that list: it drops the routine personal banking factor and adds charitable organizations you contribute to. The discrepancy moved into note." }, { "field": "rules.conditionNoGreenCardSteps (renamed greenCardBar)", "was": "Presented as the fourth condition of Treas. Reg. 301.7701(b)-2(a).", "now": "Paragraph (a) of the regulation has exactly three conditions. The green card bar sits separately at IRC 7701(b)(3)(C) and Treas. Reg. 301.7701(b)-2(f). Reworded so a reader checking the regulation finds what the page describes, and the regulation six form list split into its own rule." }, { "field": "rules.lateFilingConsequence", "was": "Said the clear and convincing evidence showing is the one relief valve.", "now": "There are two. Treas. Reg. 301.7701(b)-8(e) separately lets the IRS disregard a failure to file the statement in its sole discretion when it decides that is in the government interest." }, { "field": "rules.form8840DueDate (source and article)", "was": "Attributed the phrase including extensions, and the April and June dates, to Pub. 519 chapter 7.", "now": "Pub. 519 says only by the due date for filing Form 1040-NR. The words including extensions come from the Form 8840 instructions, which is now the cited source. The calendar dates are labelled as the dates the IRS published for 2025 returns rather than stated as the rule." }, { "field": "rules.taxHomeDefinition, new rule abodeRuleDoesNotApply", "was": "Not collected.", "now": "Added. IRC 7701(b)(3)(B)(ii) defines tax home by reference to IRC 911(d)(3) without regard to its second sentence, so the abode in the United States rule that defeats many foreign earned income exclusion claims does not apply to the closer connection exception. Matters because the same site publishes a tax home page written for the section 911 world." }, { "field": "gotchas", "was": "No mention of the student only closer connection exception, or of the obsolete Philadelphia filing address in the regulation.", "now": "Both added." } ], "reviewNotes": [ { "question": "Does the fewer than 183 days condition count raw days in the United States, or days of presence after the Treas. Reg. 301.7701(b)-3 exclusions?", "resolution": "Days of presence after the exclusions. The excluded days do not count toward the 183. This is settled by the statute and the regulation, not inferred.", "evidence": "Three independent textual hooks. (1) IRC 7701(b)(7) is prefaced For purposes of this subsection and says that except as provided in subparagraphs (B), (C) and (D) an individual is treated as present on any day of physical presence; subparagraphs (B), (C) and (D) then say a regular Canada or Mexico commuter, a person in transit between two foreign points for under 24 hours, and a crew member of a foreign vessel shall not be treated as present. The closer connection condition at IRC 7701(b)(3)(B)(i) is inside that same subsection (b), so it inherits the definition. (2) IRC 7701(b)(3)(D) says an individual shall not be treated as being present in the United States on any day if the individual is an exempt individual for that day or was unable to leave because of a medical condition that arose here. It sits inside paragraph (3) alongside the closer connection exception at (3)(B), and paragraph (3)(A) opens Except as otherwise provided in this paragraph. (3) Treas. Reg. 301.7701(b)-3(a) states its own scope: for purposes of section 7701(b) and the regulations under that section, the listed days shall be excluded and will not count as days of presence in the United States. Treas. Reg. 301.7701(b)-2 is a regulation under section 7701(b). Contrast Treas. Reg. 301.7701(b)-1(c)(2)(i), which defines physical presence only For purposes of the substantial presence test; the exclusion rule at -3(a) is deliberately written wider than that." }, { "question": "Does anything on irs.gov contradict that reading, and how should the page be worded?", "resolution": "Nothing contradicts it in operative text, but two IRS summaries are loose enough that the page should say what the count is and also tell the reader to document it.", "evidence": "The Form 8840 instructions introduce the exclusion list under the heading Substantial Presence Test and say you do not count these days for purposes of the substantial presence test, without repeating them under the closer connection heading; Form 8840 line 5 simply asks for the number of days you were present. The IRS page on the student exception describes the general exception as requiring that the individual not have been physically present on more than 182 days. Neither is an operative rule about the scope of the exclusions. Publication 519 supplies the practical catch that matters more: if you are required to file Form 8843 for exempt individual or medical days and do not file it on time, you cannot exclude those days at all, which would put a borderline filer back over 183. That is recorded as a gotcha rather than buried." }, { "question": "Are the four conditions, as the collector stated them, what the regulation says?", "resolution": "Three of the four are conditions of Treas. Reg. 301.7701(b)-2(a). The green card item is not; it is a separate disqualification.", "evidence": "Paragraph (a) lists exactly three: fewer than 183 days, a foreign tax home for the current year, and a closer connection to a single foreign country in which that tax home sits. The green card bar is IRC 7701(b)(3)(C) and Treas. Reg. 301.7701(b)-2(f). Reworded, and the regulation six form list of affirmative steps split out as its own rule. Read against Form 8840, which presents all of it as one eligibility list, so the page can present it as four things a reader must clear while citing the two provisions correctly." }, { "question": "Do the ten factors as collected match the regulation?", "resolution": "Yes, all ten, in order. The source URL was wrong and is corrected.", "evidence": "Treas. Reg. 301.7701(b)-2(d)(1)(i) through (x) read in full at eCFR. The collector transcribed all ten accurately. The IRS web page it cited lists only nine of them, dropping routine personal banking and adding charitable organizations you contribute to; Publication 519 does the same and also adds professional to the affiliations item. Form 8840 Part IV does ask about routine personal banking, at line 20." }, { "question": "Does the two country special rule have five conditions as stated?", "resolution": "Yes, verbatim in substance.", "evidence": "Treas. Reg. 301.7701(b)-2(e)(1) through (5) and the Form 8840 instructions under Closer Connection to Two Foreign Countries agree on all five. Form 8840 Part III asks lines 9 through 13 to prove them, and adds line 13 on whether you filed tax returns in both countries, which is evidence the regulation does not itself require." }, { "question": "Is the Form 8840 due date, the late filing consequence and its relief stated correctly?", "resolution": "Due date and consequence yes, relief incomplete. Corrected.", "evidence": "Form 8840 instructions: mail by the due date including extensions for filing Form 1040-NR. Pub. 519 (2025) chapter 7: 15th day of the 4th month if you are an employee with wages subject to US withholding, otherwise the 15th day of the 6th month, published as April 15, 2026 and June 15, 2026 for 2025 returns. Pub. 519 and Form 8840 both state the forfeiture and the clear and convincing evidence relief. Treas. Reg. 301.7701(b)-8(d)(2) states that relief and (e) adds a second one the collector missed, the IRS discretion to disregard a late statement. Note also that (c) of that regulation still gives Philadelphia, PA 19255 as the standalone filing address, which the current form replaces with Austin." }, { "question": "Is the distinction from a treaty tie breaker stated correctly, including the section 877A warning?", "resolution": "Yes, and it is the right cross-link for the treaty pages.", "evidence": "Pub. 519 (2025) under Dual residents: a dual resident taxpayer is resident of both countries under each country's tax laws, the treaty tie breaker resolves it, a claimant files Form 1040-NR with Form 8833 attached and computes tax as a nonresident alien, and for purposes other than figuring tax is still treated as a US resident so residency time periods are unaffected. The publication carries the note that in certain instances a tie breaker result can trigger the section 877A expatriation tax. IRC 7701(b)(6) confirms the separate point that a green card holder can cease to be treated as a lawful permanent resident by taking a treaty residence position, not waiving treaty benefits, and notifying the Secretary, which is why the tie breaker remains open to people the closer connection exception shuts out." }, { "question": "The collector's second open item: the 2026 revision of Form 8840 has not been posted, and Pub. 519 is the 2025 edition.", "resolution": "Does not affect a published field, so it is not carried as an open question.", "evidence": "This topic publishes no inflation adjusted or annually reset figure; amounts is empty. Every rule here comes from the statute or from regulations last amended in 1993, both of which are current. The only year specific content is the illustrative 2025 return due dates, which are labelled as such. Recheck the form revision and its instructions when the 2026 Form 8840 is posted, and confirm nothing in Part IV has changed." }, { "question": "Source policy, since two rules now cite a .gov site other than irs.gov.", "resolution": "Deliberate, and inside the collector contract, which lists the Internal Revenue Code and the regulations as permitted sources.", "evidence": "irs.gov does not host the text of Treas. Reg. 301.7701(b)-2, -3 or -8, or of IRC 7701(b) and 911(d)(3). Where the claim is what the regulation or the statute says, the page links eCFR or the US Code rather than an IRS summary that paraphrases it differently, which is also what the house rule about linking the primary source rather than a summary asks for. Everything a reader actually does, meaning the form, the deadline, the address and the filing mechanics, is still cited to irs.gov." } ], "note": "Three discrepancies between the IRS's own documents that a careful reader will hit. The IRS closer connection web page and Publication 519 both drop the routine personal banking factor that the regulation lists at 301.7701(b)-2(d)(1)(v), and both add charitable organizations you contribute to, which is not among the regulation's ten; Form 8840 line 20 asks about routine personal banking anyway. The web page also says that filing one of the immigration forms during or before the year in question shows intent to become a permanent resident, where the statute and the regulation both speak only of the current year. And the regulation's own machinery has aged: the affirmative steps list has not been amended since 1993 and names forms by Immigration and Naturalization Service titles including Form OF-230 and Form ETA-750, while 301.7701(b)-8(c) still gives Philadelphia as the standalone filing address that the form now puts in Austin. Working in the other direction, Form 8840 collects more than the regulation's ten factors, including automobile registration, national health plan coverage, where personal financial and legal documents are kept, and where the majority of income was earned, so the form is the more honest picture of what the IRS actually weighs." }, "alien-status": { "taxYear": 2026, "amounts": [], "rules": [ { "key": "defaultStatusIsNonresident", "statement": "If you are not a US citizen, the US treats you as a nonresident alien unless you meet one of exactly two tests for the calendar year: the green card test or the substantial presence test.", "number": null, "unit": null, "article": "IRC 7701(b)(1)(A) and (b)(1)(B)", "source": "https://www.irs.gov/individuals/international-taxpayers/determining-alien-tax-status" }, { "key": "greenCardTest", "statement": "You are a resident for US tax purposes for any calendar year in which you are a lawful permanent resident at any time. You generally have that status once USCIS has issued you a Form I-551 Permanent Resident Card, the green card.", "number": null, "unit": null, "article": "IRC 7701(b)(1)(A)(i)", "source": "https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test" }, { "key": "greenCardStatusContinues", "statement": "Green card status continues for tax purposes until it is taken away or is administratively or judicially determined to have been abandoned. That means you voluntarily renounce and abandon it in writing to USCIS, USCIS administratively terminates it, or a US federal court terminates it. Simply leaving the country, or holding a card more than 10 years old, does not end it.", "number": null, "unit": null, "article": "IRC 7701(b)(6)(A) and (B); Pub. 519 chapter 1, Resident status abandoned", "source": "https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test" }, { "key": "greenCardAbandonmentProcedure", "statement": "If you start the abandonment yourself, your resident status is treated as abandoned when you file Form I-407 or a letter of intent to abandon, with the green card attached, with USCIS or a US consular officer. Pub. 519 tells you to send it by certified mail with return receipt requested, and warns that until you have proof the filing was received you remain a resident alien for tax purposes.", "number": null, "unit": null, "article": "Pub. 519 chapter 1, Resident status abandoned", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "greenCardResidencyStartingDate", "statement": "If you meet the green card test but not the substantial presence test for the year, residency starts on the first day in that calendar year on which you are present in the United States as a lawful permanent resident. If you received the green card abroad, it is your first day of physical presence in the United States after receiving it. If you meet both tests, residency starts on the earlier of the two starting dates.", "number": null, "unit": null, "article": "IRC 7701(b)(2)(A); Treas. Reg. 301.7701(b)-4(a); Pub. 519 chapter 1, First Year of Residency", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "key": "greenCardResidencyEndingDate", "statement": "Pub. 519 gives a residency ending date earlier than December 31 only where you were a US resident this year and are not a US resident during any part of next year. Under the green card test that earlier date is the first day in the year on which you are no longer a lawful permanent resident, and you can use it only if for the rest of the year your tax home was in a foreign country and you had a closer connection to it. If you met both tests, the date is the later of the green card date and your last day of presence. Otherwise residency runs to December 31.", "number": null, "unit": null, "article": "IRC 7701(b)(2)(B); Treas. Reg. 301.7701(b)-4(b); Pub. 519 chapter 1, Last Year of Residency", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "residencyTerminationStatement", "statement": "To use a residency termination date earlier than December 31 you must file a signed statement, under penalties of perjury, attached to your return, giving your last day of presence, the date the green card was abandoned or rescinded, and facts establishing your foreign tax home and closer connection. If you do not file it you cannot claim the closer connection, unless you can show by clear and convincing evidence that you took reasonable steps to learn of and comply with the requirement.", "number": null, "unit": null, "article": "Treas. Reg. 301.7701(b)-8(a)(2) and (b)(2); Pub. 519 chapter 1", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "key": "substantialPresenceTestPointer", "statement": "The second test is the substantial presence test, a day count run over the current year and the two years before it. Its arithmetic, its day-counting exceptions and its exempt individual categories are set out on its own page and are not restated here.", "number": null, "unit": null, "article": "IRC 7701(b)(3)", "source": "https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test" }, { "key": "residentAlienTaxedOnWorldwideIncome", "statement": "A resident alien is taxed the same way as a US citizen: worldwide income from all sources is subject to US tax at graduated rates and is reported on Form 1040 or 1040-SR. The same filing statuses and the same deductions are available.", "number": null, "unit": null, "article": "IRC 1; Pub. 519 chapter 4, Resident Aliens", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-resident-aliens" }, { "key": "nonresidentTaxedOnTwoCategories", "statement": "A nonresident alien is taxed only on income effectively connected with a US trade or business, at the same graduated rates as citizens and after allowable deductions, and on US source fixed, determinable, annual, or periodical income, which is taxed on the gross amount with no deductions allowed. Both are reported on Form 1040-NR, the second on Schedule NEC.", "number": null, "unit": null, "article": "IRC 871(a) and 871(b)", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "key": "flatThirtyPercentRate", "statement": "US source fixed, determinable, annual, or periodical income of a nonresident alien that is not effectively connected with a US trade or business is taxed at a flat 30 percent on the gross amount, generally collected by withholding at the source by the payer, unless a tax treaty with the payee's country of residence sets a lower rate.", "number": 30, "unit": "percent", "article": "IRC 871(a)(1); IRC 1441(a)", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "key": "nonresidentMustFileIfEngagedInTradeOrBusiness", "statement": "A nonresident alien engaged, or considered engaged, in a trade or business in the United States during the year must file Form 1040-NR even if no income came from that business, there is no US source income at all, or the income is exempt from tax. A nonresident not engaged in a US trade or business files if US income remains on which the tax was not satisfied by withholding at the source. Pub. 519 chapter 7 then sets out three narrow exceptions to the first rule, listed in the gotchas below.", "number": null, "unit": null, "article": "Treas. Reg. 1.6012-1(b); Pub. 519 chapter 7, Nonresident Aliens", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "key": "nonresidentFilingDueDate", "statement": "A nonresident alien who is an employee receiving wages subject to US income tax withholding, or who has an office or place of business in the United States, files by the 15th day of the 4th month after the tax year ends. Everyone else files by the 15th day of the 6th month. The regulation draws the line only at wages subject to withholding; the IRS page adds the office or place of business.", "number": null, "unit": null, "article": "Treas. Reg. 1.6072-1(c); Pub. 519 chapter 7, When To File", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "key": "nonresidentNoStandardDeduction", "statement": "Nonresident aliens cannot claim the standard deduction. Itemized deductions are claimed on Schedule A (Form 1040-NR) and are generally allowed only if you have income effectively connected with a US trade or business. The one exception is narrow: a student or business apprentice eligible for Article 21(2) of the United States-India income tax treaty may claim the standard deduction, provided they do not claim itemized deductions.", "number": null, "unit": null, "article": "IRC 63(c)(6)(B); Pub. 519 chapter 5, Standard deduction", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "nonresidentFilingStatus", "statement": "Form 1040-NR gives an individual only three filing statuses: single, married filing separately, and qualifying surviving spouse. Head of household is not available to a nonresident alien at all, and a joint return is not available while either spouse is a nonresident alien unless the couple makes one of the two elections to treat the nonresident as a resident, which moves them onto a joint Form 1040 rather than Form 1040-NR. Separately, some married nonresidents who have a child, live apart from their spouse and meet five tests in the Form 1040-NR instructions may check the single box.", "number": null, "unit": null, "article": "IRC 6013(a)(1); IRC 2(b)(3); Form 1040-NR instructions, Filing Status and 2025 Tax Table Exception 1", "source": "https://www.irs.gov/pub/irs-pdf/i1040nr.pdf" }, { "key": "dualStatusYearDefinition", "statement": "A dual-status tax year is a year in which you were both a resident alien and a nonresident alien. It normally happens in the year you arrive in or depart from the United States. Different rules apply to each part of the year: worldwide income for the resident part, and only effectively connected income plus the flat rate on other US source income for the nonresident part, with no deductions against that flat-rate income.", "number": null, "unit": null, "article": "Pub. 519 chapter 6, Introduction and How To Figure Your Tax", "source": "https://www.irs.gov/individuals/international-taxpayers/dual-status-individuals" }, { "key": "dualStatusWhichReturn", "statement": "Which return you file depends on your status on the last day of the year. A resident on that day files Form 1040 or 1040-SR as the Dual Status Return, with a Form 1040-NR attached as the Dual Status Statement. A nonresident on that day files Form 1040-NR as the Dual Status Return, with a Form 1040 or 1040-SR attached as the statement. The Form 1040-NR instructions say to write those labels across the top and not to sign the attached statement; Pub. 519 for 2025 says to check the new Other checkbox at the top of the return and write the label on the entry line.", "number": null, "unit": null, "article": "Pub. 519 chapter 6, Forms To File; Form 1040-NR instructions, What and Where To File for a Dual-Status Year", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "dualStatusRestrictions", "statement": "A dual-status filer cannot use the standard deduction, although allowable deductions can be itemized; cannot use the head of household tax table column; and cannot file a joint return unless the choosing resident alien status election or the nonresident spouse election applies. A married dual-status filer who does not file jointly must use the married filing separately rates, unless they lived apart from their spouse for the last 6 months of the year and are a married resident of Canada, Mexico or South Korea or a married US national, in which case they may be able to file as single.", "number": null, "unit": null, "article": "Pub. 519 chapter 6, Restrictions for Dual-Status Taxpayers", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "firstYearChoiceConditions", "statement": "The first-year choice lets someone who meets neither test for the current year or the prior year, and did not choose resident treatment for part of the prior year, be treated as a US resident for part of the current year, provided they meet the substantial presence test in the following year. The result is a dual-status year, not a full resident year.", "number": null, "unit": null, "article": "IRC 7701(b)(4)(A)(i), (ii) and (iii)", "source": "https://www.irs.gov/individuals/international-taxpayers/tax-residency-status-first-year-choice" }, { "key": "firstYearChoiceConsecutiveDays", "statement": "To make the first-year choice you must be present in the United States for at least 31 days in a row in the current year. Residency then starts on the first day of the earliest 31-day period you actually use to qualify: if you satisfy the 75 percent test for more than one such period, it is the first of them, and if you satisfy it only for a later period, it is the first day of that later period.", "number": 31, "unit": "days", "article": "IRC 7701(b)(4)(A)(iv)(I) and 7701(b)(4)(C); Treas. Reg. 301.7701(b)-4(c)(3)(ii)", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "key": "firstYearChoicePresencePercent", "statement": "You must also be present for at least 75 percent of the days from the first day of that 31-day period through December 31 of the current year, treating up to 5 days of absence as days of presence. The 5-day allowance applies only to this 75 percent test: the regulation says those days are not treated as days of presence for the 31 consecutive day requirement.", "number": 75, "unit": "percent", "article": "IRC 7701(b)(4)(A)(iv)(II); Treas. Reg. 301.7701(b)-4(c)(3)(ii)", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "key": "firstYearChoiceExemptDaysExcluded", "statement": "When you count days for either the 31 day requirement or the 75 percent requirement, you do not count days you were in the United States as an exempt individual or under any of the other day-counting exceptions. Those exceptions are the ones used for the substantial presence test and are set out on that page.", "number": null, "unit": null, "article": "IRC 7701(b)(4)(D); Pub. 519 chapter 1, First-Year Choice", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "key": "firstYearChoiceTiming", "statement": "You cannot file the return or the first-year choice statement until you have met the substantial presence test for the following year, so an extension on Form 4868 is often needed, with payment of the tax you expect to owe figured as if you were a nonresident for the whole year. Once made, the choice cannot be revoked without IRS approval.", "number": null, "unit": null, "article": "IRC 7701(b)(4)(E) and (F); Pub. 519 chapter 1, First-Year Choice", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "choosingResidentAlienStatus", "statement": "A dual-status alien can elect to be treated as a US resident for the whole year if they were a nonresident at the start of the year, are a resident or citizen at the end of it, are married to a US citizen or resident at the end of it, and the spouse joins in the choice. Both are then taxed on worldwide income, must file jointly for that year, and neither can make the choice again in a later year. A single person cannot make it, and making it lifts the dual-status restrictions in Pub. 519 chapter 6.", "number": null, "unit": null, "article": "IRC 6013(h)(1) and (h)(2); Pub. 519 chapter 1, Choosing Resident Alien Status", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "key": "nonresidentSpouseElection", "statement": "If at the end of the tax year one spouse is a US citizen or resident and the other is a nonresident alien, they can elect to treat the nonresident spouse as a US resident by attaching a statement signed by both to a joint return. Both then report worldwide income for that year and all later years the choice is in effect, and neither can then claim under any tax treaty not to be a US resident. The Form 1040-NR instructions add that making the election may forfeit other benefits a treaty would otherwise give.", "number": null, "unit": null, "article": "IRC 6013(g)(1), (2) and (3); Pub. 519 chapter 1, Nonresident Spouse Treated as a Resident", "source": "https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse" }, { "key": "nonresidentSpouseElectionEnds", "statement": "The election is suspended for any later year in which neither spouse is a US citizen or resident. It ends permanently on revocation by either spouse by that year's filing due date, on the death of a spouse, on legal separation under a decree of divorce or separate maintenance, or when the IRS ends it for inadequate records. Once it has ended in any of those ways, neither spouse can ever make the choice again.", "number": null, "unit": null, "article": "IRC 6013(g)(3), (4), (5) and (6); Pub. 519 chapter 1, Suspending the Choice and Ending the Choice", "source": "https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse" }, { "key": "treatyTiebreakerOverride", "statement": "Meeting the green card test does not settle the question if a tax treaty applies. Pub. 519 says that someone who claims foreign residency under a treaty tiebreaker rule is treated as a nonresident for purposes of their tax liability. The statute goes further: a lawful permanent resident ceases to be treated as one if they begin to be treated as a resident of the treaty country, do not waive the treaty benefits available to residents of that country, and notify the IRS, which the IRS says is done on Forms 8833 and 8854.", "number": null, "unit": null, "article": "IRC 7701(b)(6), concluding sentence, which Pub. 519 cites as section 7701(b)(6)(B); IRC 6114", "source": "https://www.irs.gov/individuals/international-taxpayers/expatriation-tax" } ], "forms": [ { "form": "1040", "purpose": "The return a resident alien files, reporting worldwide income at the same graduated rates as a US citizen, and the return a dual-status filer uses when resident on the last day of the year.", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-resident-aliens" }, { "form": "1040-NR", "purpose": "The return a nonresident alien files, reporting effectively connected income on page 1 and US source income taxed at the flat rate on Schedule NEC.", "source": "https://www.irs.gov/pub/irs-pdf/i1040nr.pdf" }, { "form": "8833", "purpose": "Discloses a treaty-based return position, including a claim of foreign residency under a treaty tiebreaker that overrides the green card test.", "source": "https://www.irs.gov/individuals/international-taxpayers/expatriation-tax" }, { "form": "8843", "purpose": "Statement for exempt individuals and individuals with a medical condition, used to exclude days from the substantial presence day count.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "form": "8854", "purpose": "Initial and annual expatriation statement, required of a long-term green card holder who gives up permanent resident status, including by a treaty tiebreaker claim.", "source": "https://www.irs.gov/pub/irs-pdf/i8854.pdf" }, { "form": "4868", "purpose": "Extension of time to file, used for the first-year choice while waiting to meet the substantial presence test in the following year.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" } ], "gotchas": [ { "statement": "A green card holder who moves abroad is still a US resident for tax purposes, taxed on worldwide income and filing Form 1040, until the status is formally renounced in writing to USCIS or terminated administratively or judicially. Leaving the country, letting the card expire, or holding a card more than 10 years old does not end it.", "source": "https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test" }, { "statement": "The rules for filing and paying are the same whether a US citizen or resident alien lives in the United States or abroad: worldwide income from all sources is taxable, and benefits such as the foreign earned income exclusion and the foreign tax credit only apply if a US return is filed.", "source": "https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad" }, { "statement": "Under US immigration law a lawful permanent resident who is required to file a US return as a resident and fails to do so may be regarded as having abandoned status, and may lose the green card itself.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "Giving up a green card is not always a clean exit. Someone who was a lawful permanent resident for at least 8 of the last 15 tax years is a long-term resident and can be subject to the expatriation tax and to Form 8854 reporting. Claiming foreign residency under a treaty tiebreaker counts as ceasing to be a lawful permanent resident, so it can start the same machinery.", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "statement": "A dual-status year is not the same as a half-price year. You lose the standard deduction entirely, you cannot use head of household rates, and you cannot file jointly unless one of the two elections applies, which often leaves a dual-status filer paying more than a full-year resident on the same income.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "A dual-status filer also loses several credits outright. Pub. 519 says you cannot claim the education credits, the earned income credit, or the credit for the elderly or the disabled unless you are married and elect to be treated as a resident for the whole year on a joint return with a US citizen or resident spouse.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "Electing to treat a nonresident spouse as a US resident puts that spouse's worldwide income into the US tax net for that year and every later year the choice stays in effect, not just for the year it saves tax.", "source": "https://www.irs.gov/individuals/international-taxpayers/nonresident-spouse" }, { "statement": "Residency does not automatically restart at zero. If you were a US resident during any part of the preceding calendar year and are a resident for any part of the current year, you are treated as a US resident from January 1 of the current year.", "source": "https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "statement": "On the flat 30 percent tax no deductions are allowed at all: it applies to the gross amount of the US source fixed or determinable income, which is why a treaty rate is worth checking before assuming the withholding was correct.", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "statement": "Not every withholding rate on a nonresident is 30 percent. The taxable part of a scholarship or fellowship grant paid to a nonresident student or scholar temporarily in the United States on an F, J, M or Q visa is withheld at 14 percent, or a lower treaty rate, and is reported on Form 1042-S.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "The rule that a nonresident engaged in a US trade or business must file regardless of income has three narrow exceptions in Pub. 519 chapter 7: a student, teacher or trainee temporarily present on an F, J, M or Q visa with no income subject to tax; an India treaty student or business apprentice who is single or a qualifying surviving spouse and whose gross income is at or below a dollar threshold set for the year; and a partner in a US partnership not engaged in a US trade or business whose Schedule K-1 shows only income that is not effectively connected.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" }, { "statement": "Filing late can cost a nonresident their deductions and credits outright, not just interest. To get the benefit of allowable deductions or credits you must file a true and accurate return, and for this purpose a return is timely only if it is filed within 16 months of the due date.", "source": "https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens" }, { "statement": "The first-year choice is not the same as the election for a nonresident spouse. Pub. 519 states plainly that you do not have to be married to make the first-year choice, while the two elections that produce a full resident year both require a spouse who is a US citizen or resident.", "source": "https://www.irs.gov/pub/irs-pdf/p519.pdf" } ], "confidence": "P", "openQuestions": null, "corrections": [ { "field": "rules.firstYearChoiceConsecutiveDays.article", "was": "IRC 7701(b)(4)(A)(iii)", "now": "IRC 7701(b)(4)(A)(iv)(I) and 7701(b)(4)(C); Treas. Reg. 301.7701(b)-4(c)(3)(ii)", "why": "Clause (iii) is the requirement to be a resident under the substantial presence test in the following year. The 31 consecutive days requirement is clause (iv), subclause (I). The statement also now carries the earliest qualifying period rule, which decides the residency starting date when a person has more than one 31-day run." }, { "field": "rules.firstYearChoicePresencePercent.article", "was": "IRC 7701(b)(4)(A)(iv)", "now": "IRC 7701(b)(4)(A)(iv)(II); Treas. Reg. 301.7701(b)-4(c)(3)(ii)", "why": "Clause (iv) has two subclauses. The 75 percent testing period rule is subclause (II). The statement now also says that the 5 day allowance applies only to the 75 percent test, because the regulation states expressly that those days are not days of presence for the 31 consecutive day requirement." }, { "field": "rules.residencyTerminationStatement.article", "was": "Treas. Reg. 301.7701(b)-4(e)", "now": "Treas. Reg. 301.7701(b)-8(a)(2) and (b)(2)", "why": "301.7701(b)-4 is Residency time periods and its paragraph (e) is a special rule, not the statement procedure. The statement to establish a residency termination date is in 301.7701(b)-8, Procedural rules. The consequence of not filing it has also been added." }, { "field": "rules.treatyTiebreakerOverride.article and statement", "was": "IRC 7701(b)(6)(B); IRC 6114, with the effect described only as being treated as a nonresident for figuring US tax liability", "now": "IRC 7701(b)(6), concluding sentence, noting that Pub. 519 itself cites 7701(b)(6)(B); statement now gives the three statutory conditions and the Form 8833 plus Form 8854 notification", "why": "7701(b)(6)(B) is the clause saying the status has not been revoked. The tiebreaker rule is the flush sentence after subparagraph (B), and it requires all three of commencing treaty residence, not waiving the treaty benefits, and notifying the IRS. The statute's effect is that the person ceases to be treated as a lawful permanent resident, which is what can pull a long-term resident into the expatriation rules." }, { "field": "rules.nonresidentSpouseElection.statement", "was": "generally neither can claim treaty benefits as a resident of a foreign country", "now": "neither can then claim under any tax treaty not to be a US resident, with the Form 1040-NR instructions' softer caution that other treaty benefits may be forfeited", "why": "The original was broader than the source. Pub. 519 bars claiming under a treaty not to be a US resident. It does not bar every treaty benefit. The Form 1040-NR instructions say only that you may forfeit benefits otherwise available." }, { "field": "rules.nonresidentSpouseElectionEnds.article", "was": "IRC 6013(g)(4)", "now": "IRC 6013(g)(3), (4), (5) and (6)", "why": "Suspension is (g)(3), the four termination events are (g)(4), termination by the Secretary for inadequate records is (g)(5), and the once-only bar on ever making the election again is (g)(6). Citing only (g)(4) left the once-only rule, which is the part readers get wrong, uncited." }, { "field": "rules.nonresidentFilingStatus.statement", "was": "There is no joint return and no head of household for a nonresident alien, except through the election to treat a nonresident spouse as a resident.", "now": "Head of household is barred outright; the exception applies only to the joint return, and the electing couple files a joint Form 1040 rather than Form 1040-NR. The married living apart single option is now named.", "why": "The exception clause as written implied head of household could be reached through the election. It cannot. The election produces married filing jointly on Form 1040. The Form 1040-NR instructions separately let some married nonresidents who have a child and live apart from their spouse check the single box, which the record did not mention." }, { "field": "rules.nonresidentFilingDueDate.statement", "was": "the 4th month date turned only on being an employee with wages subject to withholding", "now": "adds having an office or place of business in the United States, and says the regulation and the IRS page draw the line differently", "why": "The IRS page on taxation of nonresident aliens adds the office or place of business condition to the 4th month date. Treas. Reg. 1.6072-1(c) mentions it only for foreign trusts. A reader following only the regulation would file in the wrong month." }, { "field": "rules.dualStatusRestrictions.statement", "was": "A married dual-status filer who does not file jointly must use the married filing separately rates.", "now": "adds the exception for filers who lived apart from their spouse for the last 6 months and are a married resident of Canada, Mexico or South Korea or a married US national", "why": "Pub. 519 chapter 6 states the exception immediately after the married filing separately rule. Stating the rule without it was stronger than the source." }, { "field": "rules.dualStatusWhichReturn.statement", "was": "marked Dual Status Return, with a Form 1040-NR attached as the Dual Status Statement", "now": "adds that the Form 1040-NR instructions say not to sign the attached statement, and that the 2025 Pub. 519 says to check the new Other checkbox and write the label on the entry line", "why": "The two 2025 primary documents describe the mechanics slightly differently and Pub. 519 flags the Other checkbox as new for 2025. The do not sign instruction was missing entirely." }, { "field": "rules.greenCardResidencyEndingDate.source and statement", "was": "sourced to the residency starting and ending dates page; no mention of the later of rule when both tests are met", "now": "sourced to Pub. 519 chapter 1, Last Year of Residency; adds the later of rule and the gating condition that you are not a US resident during any part of the following year", "why": "The IRS page's green card ending date section does not carry the earlier termination date rule at all. Only Pub. 519 does. The rule was correct but cited to a page that does not state it." }, { "field": "rules.firstYearChoiceExemptDaysExcluded", "was": "not collected", "now": "added as a rule", "why": "Pub. 519, the first-year choice page and the residency dates page all say that days in the United States as an exempt individual do not count toward either the 31 days or the 75 percent. A reader on an F or J visa counting raw calendar days would qualify on paper and not in fact. Stated as a pointer to the substantial presence page, with no arithmetic restated." }, { "field": "gotchas, filing threshold", "was": "A nonresident alien engaged in a US trade or business must file Form 1040-NR even with no US source income and even if the income is exempt by treaty, so there is no dollar threshold to hide behind.", "now": "replaced with the three exceptions Pub. 519 chapter 7 actually lists, including the India treaty gross income threshold, with no dollar figure published", "why": "The original was flatly contradicted by Pub. 519's own exceptions, one of which is a dollar threshold and another of which covers F, J, M and Q students with no taxable income, which is a large share of the readership for this page." }, { "field": "gotchas, added", "was": "not collected", "now": "the 14 percent withholding rate on taxable scholarship and fellowship grants to F, J, M and Q visa holders; the 16 month deadline for keeping deductions and credits; the loss of the education credits, earned income credit and credit for the elderly or disabled in a dual-status year; and the fact that the first-year choice does not require a spouse", "why": "Each is stated on a primary IRS source, each contradicts a reasonable reading of what the record already said, and the first would make a reader think their withholding was wrong." } ], "reviewNotes": [ { "question": "The 2026 revisions of Publication 519, Form 1040-NR and its instructions have not been issued. Does anything published here depend on a figure or a rule that changes annually?", "resolution": "No. Amounts is empty by design and every rule here is statutory or procedural. The record can ship graded P against the 2025 revisions.", "evidence": "Every rule traces to IRC 7701(b), IRC 871, IRC 1441, IRC 63(c)(6)(B), IRC 6013, IRC 2(b)(3), Treas. Reg. 301.7701(b)-4, 301.7701(b)-8, 1.6072-1(c) and 1.6012-1(b), or to the IRS international taxpayer pages, which carry no year label. Publication 519 (2025), read at https://www.irs.gov/pub/irs-pdf/p519.pdf, is the For use in preparing 2025 Returns revision, and the 2025 Instructions for Form 1040-NR at https://www.irs.gov/pub/irs-pdf/i1040nr.pdf agree with it on every rule collected." }, { "question": "Could the Form 1040-NR filing statuses change for 2026?", "resolution": "Not without a change in the statute. The three statuses follow from IRC 6013(a)(1), which bars a joint return while either spouse is a nonresident alien at any time in the year, and IRC 2(b)(3), which bars head of household for a nonresident alien. This is not an annual item.", "evidence": "IRC 6013(a)(1) and IRC 2(b)(3) read at uscode.house.gov; 2025 Instructions for Form 1040-NR, 2025 Tax Table Exception 1: filing Form 1040-NR gives you only three filing statuses, single, married filing separately, or qualifying surviving spouse, and do not use the head of household column. https://www.irs.gov/pub/irs-pdf/i1040nr.pdf" }, { "question": "What is the dual-status e-file restriction, and does it affect a published field?", "resolution": "It does not. It is an exception to the paid preparer e-file mandate, not a bar on the taxpayer. Nothing in this record turns on it, and it is not published.", "evidence": "2025 Instructions for Form 1040-NR, Required e-filing: paid tax return preparers must generally e-file Forms 1040-NR for tax years ending on or after December 31, 2020, unless filing for a dual-status taxpayer, a fiscal-year taxpayer, a trust, or an estate, citing Notice 2020-70. https://www.irs.gov/pub/irs-pdf/i1040nr.pdf" }, { "question": "Is any dollar figure at risk in this topic?", "resolution": "None is published, and the re-read found a live reason to keep it that way. The two 2025 primary documents disagree on the India treaty filing threshold, which is exactly the kind of figure a page would have copied with confidence.", "evidence": "Publication 519 (2025) chapter 7 gives the India student and business apprentice filing exception as gross income at or below 15,000 dollars if single and 30,000 dollars if a qualifying surviving spouse. The 2025 Instructions for Form 1040-NR give 15,750 dollars and 31,500 dollars for the same exception. Neither figure is published here; the gotcha says the threshold is set for the year and points the reader at the instructions for the year they are filing." }, { "question": "Does this record restate the substantial presence arithmetic, which is owned by its own topic and by data/tax-treaties.json?", "resolution": "No. The only pointer rule, substantialPresenceTestPointer, carries a null number and says expressly that the arithmetic, the day-counting exceptions and the exempt individual categories live on that page. The one new rule about exempt days, firstYearChoiceExemptDaysExcluded, states that the exclusion applies and points at the substantial presence page for what the exceptions are, without reproducing any of them. The two numbers in this record, 31 days and 75 percent, belong to the first-year choice in IRC 7701(b)(4) and appear nowhere in the substantial presence test.", "evidence": "IRC 7701(b)(3) is the substantial presence test; IRC 7701(b)(4) is the first-year election. The cross-dataset check in scripts/verify-expat-residency.js compares only currentYearMinDays and threeYearDays in the substantial-presence topic, neither of which this record carries." }, { "question": "Does the green card residency starting date rule for someone who received the card abroad actually appear on a primary source, or was it inferred?", "resolution": "It appears verbatim on the IRS page and needed no change.", "evidence": "IRS, Residency starting and ending dates: if you receive your green card abroad, then the residency starting date is your first day of physical presence in the United States after you receive your green card. https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates" }, { "question": "Is the India standard deduction exception stated narrowly enough for a YMYL page?", "resolution": "Yes, and it has been tightened. It is limited to a student or business apprentice eligible for the benefits of Article 21(2) of the United States-India income tax treaty, and it is conditional on not claiming itemized deductions. No other nonresident alien can claim the standard deduction.", "evidence": "Publication 519 (2025) chapter 5, Standard deduction: nonresident aliens cannot claim the standard deduction, followed by the India special rule and the condition that you do not claim itemized deductions. IRC 63(c)(6)(B) sets the standard deduction at zero for a nonresident alien individual." }, { "question": "Is the flat 30 percent rate correctly described as applying to the gross amount with no deductions?", "resolution": "Yes, in the statute, in Pub. 519 and on the IRS page. It is now stated in the rule itself and not only in the gotcha.", "evidence": "IRC 871(a)(1) imposes a tax of 30 percent of the amount received from sources within the United States. Publication 519 (2025) chapter 4, The 30% Tax: the 30 percent or lower treaty rate applies to the gross amount of US source fixed, determinable, annual, or periodical income. IRS, Taxation of nonresident aliens: FDAP income is taxed at a flat 30 percent and no deductions are allowed against such income. IRC 1441(a) sets the matching withholding rate at 30 percent." } ], "note": "Three things the IRS pages leave out or bury. First, the green card page states the continuing-status rule but does not say what actually ends it in practice: Pub. 519 chapter 1 is where the Form I-407 procedure appears, along with the instruction to send it by certified mail with return receipt and the warning that you remain a resident alien for tax purposes until you have proof the filing was received. Second, the IRS page on residency starting and ending dates does not carry the earlier residency termination date rule for green card holders at all; only Pub. 519 chapter 1 does, and only there is the condition spelled out that you must not be a US resident during any part of the following year. Third, the alien status pages present the green card test as decisive, while the concluding sentence of IRC 7701(b)(6) can make a green card holder cease to be treated as a lawful permanent resident, which is stronger than Pub. 519's note about tax liability and can put a long-term resident into the expatriation rules. Amounts is deliberately empty: this topic turns on tests, elections and one statutory rate. That decision was tested during verification and held. Publication 519 (2025) and the 2025 Instructions for Form 1040-NR give different dollar thresholds for the same India treaty filing exception, 15,000 and 30,000 against 15,750 and 31,500, because the Publication was revised before the 2025 standard deduction increase worked through. Any year-sensitive dollar figure a reader also needs belongs to its own dataset. The substantial presence test is referenced only as a pointer, since its arithmetic is owned by its own record and by data/tax-treaties.json shared.substantialPresenceTest." } } }