What is a tax home?

The rules, in the two contexts

Tax home for travel expenses

• 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. Pub. 463 (2025), chapter 1, Tax Home
• A tax home is not a single address. It includes the entire city or general area in which your business or work is located. Pub. 463 (2025), chapter 1, Tax Home; Tax Topic 511
• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Tax home
• 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. Pub. 463 (2025), chapter 1, Main place of business or work; Tax Topic 511
• 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. Pub. 463 (2025), chapter 1, Factors used to determine tax home
• 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. Pub. 463 (2025), chapter 1, Factors used to determine tax home, and Example 2

The abode rule, and why it disqualifies people

• 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. Instructions for Form 2555 (2025), Tax home test; IRS, Foreign earned income exclusion: tax home in foreign country, Abode
• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Abode
• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Abode
• 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. Instructions for Form 2555 (2025), Service in a combat zone; IRS, Foreign earned income exclusion: tax home in foreign country, Abode

Tax home for the foreign earned income exclusion

• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Tax home
• 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. Instructions for Form 2555 (2025), Tax home test; Pub. 54 (Rev. 12-2025), chapter 4, Requirements
• 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. Instructions for Form 2555 (2025), Tax home test, compared with Pub. 463 (2025), chapter 1, Tax Home
• 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. 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
• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Temporary or indefinite assignment
• 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. IRS, Foreign earned income exclusion: tax home in foreign country, Temporary or indefinite assignment; Tax Topic 511; Pub. 463 (2025), chapter 1, Example 3

Temporary or indefinite, and the one year rule

• 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. Pub. 463 (2025), chapter 1, Temporary assignment vs. indefinite assignment
• 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. Pub. 463 (2025), chapter 1, Temporary assignment vs. indefinite assignment
• 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. Pub. 463 (2025), chapter 1, Determining temporary or indefinite
• 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. Tax Topic 511, Business travel expenses; Pub. 463 (2025), chapter 1, Exception for federal crime investigations or prosecutions

What people get wrong about tax home

• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source
• 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. IRS source

Which forms does this involve?

Where this matters

A foreign tax home is a condition of the foreign earned income exclusion, whichever qualifying test you use: physical presence or bona fide residence. A foreign tax home is also one of the four conditions for the closer connection exception that keeps a snowbird out of US residency, though there the question is about the whole year rather than about deductions.