Table of Contents
To meet this test, you must be one of the following:
A U.S. citizen who is a bona fide resident of a foreign country, or countries, for an uninterrupted period that includes an entire tax year (January 1–December 31, if you file a calendar year return), or
A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country, or countries, for an uninterrupted period that includes an entire tax year (January 1–December 31, if you file a calendar year return). See Pub. 901, U.S. Tax Treaties, for a list of countries with which the United States has an income tax treaty in effect.
Whether you are a bona fide resident of a foreign country depends on your intention about the length and nature of your stay. Evidence of your intention may be your words and acts. If these conflict, your acts carry more weight than your words. Generally, if you go to a foreign country for a definite, temporary purpose and return to the United States after you accomplish it, you are not a bona fide resident of the foreign country. If accomplishing the purpose requires an extended, indefinite stay, and you make your home in the foreign country, you may be a bona fide resident. See Pub. 54 for more information and examples.
To meet this test, you must be a U.S. citizen or resident alien who is physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. A full day means the 24-hour period that starts at midnight.
To figure 330 full days, add all separate periods you were present in a foreign country during the 12-month period shown on line 16. The 330 full days can be interrupted by periods when you are traveling over international waters or are otherwise not in a foreign country. See Pub. 54 for more information and examples.
Enter in this part the total foreign earned income you earned and received (including income constructively received) during the tax year. If you are a cash basis taxpayer, include in income on Form 1040, the foreign earned income you received during the tax year regardless of when you earned it. (For example, include wages on Form 1040, line 7.)
Income is earned in the tax year you perform the services for which you receive the pay. But if you are a cash basis taxpayer and, because of your employer's payroll periods, you received your last salary payment for 2013 in 2014, that income may be treated as earned in 2014. If you cannot treat that salary payment as income earned in 2014, the rules explained under Income earned in prior year, discussed later, apply. See Pub. 54 for more details.
Foreign earned income for this purpose means wages, salaries, professional fees, and other compensation received for personal services you performed in a foreign country during the period for which you meet the tax home test and either the bona fide residence test or the physical presence test. It also includes noncash income (such as a home or car) and allowances or reimbursements.
Foreign earned income does not include amounts that are actually a distribution of corporate earnings or profits rather than a reasonable allowance as compensation for your personal services. It also does not include the following types of income.
Pension and annuity income (including social security benefits and railroad retirement benefits treated as social security).
Interest, ordinary dividends, capital gains, alimony, etc.
Portion of 2013 moving expense deduction allocable to 2014 that is included in your 2014 gross income. For details, see Moving Expense Attributable to Foreign Earnings in 2 Years under Moving Expenses in Pub. 54.
Amounts paid to you by the U.S. Government or any of its agencies if you were an employee of the U.S. Government or any of its agencies.
Amounts received after the end of the tax year following the tax year in which you performed the services.
Amounts you must include in gross income because of your employer's contributions to a nonexempt employees' trust or to a nonqualified annuity contract.
The value of your housing is not excluded from gross income under section 119 (unless you maintained a second foreign household as defined later), and
You meet the tax home test and either the bona fide residence or physical presence test.
If you and your spouse lived in the same foreign household and file a joint return, you must figure your housing amounts (line 33) jointly. If you file separate returns, only one spouse can claim the housing exclusion or deduction.
In figuring your housing amount jointly, either spouse (but not both) can claim the housing exclusion or housing deduction. However, if you and your spouse have different periods of residence or presence, and the one with the shorter period of residence or presence claims the exclusion or deduction, you can claim as housing expenses only the expenses for that shorter period. The spouse claiming the exclusion or deduction can aggregate the housing expenses of both spouses, subject to the limit on housing expenses (line 29b), and subtract his or her base housing amount.
If you and your spouse lived in separate foreign households, you each can claim qualified expenses for your own household only if:
Your tax homes were not within a reasonable commuting distance of each other, and
Each spouse's household was not within a reasonable commuting distance of the other spouse's tax home.
Otherwise, only one spouse can claim his or her housing exclusion or deduction. This is true even if you and your spouse file separate returns.
See Pub. 54 for additional information.
|Note. If the location in which you incurred housing expenses is not listed in the table at the end of the instructions, and the number of days in your qualifying period that fall within the 2014 tax year is 365, DO NOT complete this worksheet. Instead, enter $29,760 on line 29b.|
|1.||Enter the number of days in your qualifying period that fall within the 2014 tax year (see the instructions for line 31)||1.|
|2.||Did you enter 365 on line 1?|
No. If the amount on line 1 is less than 365, skip line 2 and go to line 3.
Yes. Locate the amount under the column Limit on Housing Expenses (full year) from the table at the end of the instructions for the location in which you incurred housing expenses. This is your limit on housing expenses. Enter the amount here and on line 29b. Also, see Election to apply higher limit on housing expenses, later.
Do not complete the rest of this worksheet
|3.||Enter the amount under the column Limit on Housing Expenses (daily) from the table at the end of the instructions for the location in which you incurred housing expenses. If the location is not listed in the table, enter $81.53. Also, see Election to apply higher limit on housing expenses, later.||3.|
|4.||Multiply line 1 by line 3. This is your limit on housing expenses. Enter the result here and on line 29b||4.|
For 2014, because your location is not listed in the table at the end of the instructions, your limit on housing expenses is $81.53 per day ($29,760 divided by 365). If you file a calendar year return and your qualifying period is January 1, 2014, to October 2, 2014 (275 days), you would enter $22,421 on line 29b ($81.53 multiplied by 275 days).
For 2013 you could elect to apply the 2014 limits on housing expenses as discussed in section 4 of Notice 2014-29 available at www.irs.gov/irb/2014-18_IRB/ar07.html.
The IRS and Treasury Department anticipate that you will also be allowed to make an election to apply the 2015 limits to figure your 2014 limit on housing expenses. The authorization to make the election will be provided in a future annual notice published in the Internal Revenue Bulletin.
If you moved during the 2014 tax year and incurred housing expenses in more than one foreign location as a result, complete the Limit on Housing Expenses Worksheet for each location in which you incurred housing expenses, entering the number of qualifying days during which you lived in the applicable location on line 1. Add the results shown on line 4 of each worksheet, and enter the total on line 29b.
You establish a tax home and bona fide residence in a foreign country on August 14, 2014. You maintain the tax home and residence until January 31, 2016. You are a calendar year taxpayer. The number of days in your qualifying period that fall within your 2014 tax year is 140 (August 14 through December 31, 2014).
Wages and salaries received from your employer.
The fair market value of compensation provided in kind (such as the fair rental value of lodging provided by your employer as long as it is not excluded on line 25).
Rent paid by your employer directly to your landlord.
Amounts paid by your employer to reimburse you for housing expenses, educational expenses of your dependents, or as part of a tax equalization plan.
If you claim either of the exclusions, you cannot claim any deduction (including moving expenses), credit, or exclusion that is definitely related to the excluded income. If only part of your foreign earned income is excluded, you must prorate such items based on the ratio that your excludable earned income bears to your total foreign earned income. See Pub. 54 for details on how to figure the amount allocable to the excluded income.
The exclusion under section 119 and the housing deduction are not considered definitely related to the excluded income.
|1.||Enter the amount from your 2013 Form 2555, line 46||1.|
|2.||Enter the amount from your 2013 Form 2555, line 48||2.|
|3.||Subtract line 2 from line 1. If the result is zero, stop; enter -0- on line 49 of your 2014 Form 2555. You do not have any housing deduction carryover from 2013||3.|
|4.||Enter the amount from your 2014 Form 2555, line 47||4.|
|5.||Enter the amount from your 2014 Form 2555, line 48||5.|
|6.||Subtract line 5 from line 4||6.|
|7.||Enter the smaller of line 3 or line 6 here and on line 49 of your 2014 Form 2555. If line 3 is more than line 6, you cannot carry the difference over to any future tax year||7.|
If line 33 is more than line 36 and line 27 is more than line 43, complete this part to figure your housing deduction.
|2014 LIMITS ON HOUSING EXPENSES|
|Country||City or Other Location||Limit on Housing
|Limit on Housing
Expenses (full year)
|Darwin, Northern Country||83.84||30,600|
|Bahamas, The||Grand Bahama Island||84.66||30,900|
|Rio de Janeiro||96.16||35,100|
|Cayman Islands||Grand Cayman||131.51||48,000|
|All cities other than Bogota||135.34||49,400|
|Costa Rica||San Jose||87.67||32,000|
|Dominican Republic||Santo Domingo||124.66||45,500|
|Frankfurt am Main||120.55||44,000|
|Germany (continued)||All cities other than Augsburg, Babenhausen, Bad Aibling, Bad Kreuznach, Bad Nauheim, Baumholder, Berchtesgaden, Berlin, Birkenfeld, Boeblingen, Bonn, Bremen, Bremerhaven, Butzbach, Cologne, Darmstadt, Delmenhorst, Duesseldorf, Erlangen, Flensburg, Frankfurt am Main, Friedberg, Fuerth, Garlstedt, Garmisch-Partenkirchen, Geilenkirchen, Gelnhausen, Germersheim, Giebelstadt, Giessen, Grafenwoehr, Grefrath, Greven, Gruenstadt, Hamburg, Hanau, Handorf, Hannover, Heidelberg, Heilbronn, Herongen, Idar-Oberstein, Ingolstadt, Kaiserslautern, Landkreis, Kalkar, Karlsruhe, Kerpen, Kitzingen, Koblenz, Leimen, Leipzig, Ludwigsburg, Mainz, Mannheim, Mayen, Moenchen-Gladbach, Muenster, Munich, Nellingen, Neubruecke, Noervenich, Nuernberg, Ober Ramstadt, Oberammergau, Osterholz-Scharmbeck, Pirmasens, Rheinau, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf, and Zweibruecken||113.42||41,400|
|Holy See, The||156.99||57,300|
|All cities other than Avellino, Brindisi, Catania, Florence, Gaeta, Genoa, Gioia Tauro, La Spezia, Leghorn, Milan, Mount Vergine, Naples, Nettuno, Parma, Pisa, Pordenone-Aviano, Rome, Sardinia, Sigonella, Turin, Verona, and Vicenza||95.89||35,000|
|Korea||Ammo Depot #9||82.47||30,100|
|Korea (continued)||All cities other than Ammo Depot #9, Camp Carroll, Camp Colbern, Camp Market, Camp Mercer, Changwon, Chinhae, Chunchon, K-16, Kimhae, Kimpo Airfield, Kunsun, Kwangju, Munsan, Osan AB, Pusan, Pyongtaek, Seoul, Suwon, Taegu, Tongduchon, Uijongbu, and Waegwan||90.41||33,000|
|All cities other than Kuwait City||158.08||57,700|
|All cities other than Kuala Lumpur||92.33||33,700|
|All cities other than Ciudad Juarez, Cuernavaca, Guadalajara, Hermosillo, Matamoros, Mazatlan, Merida, Metapa, Mexico City, Monterrey, Nogales, Nuevo Laredo, Reynosa, Tapachula, Tijuana, Tuxtla Gutierrez, and Veracruz||107.95||39,400|
|All cities other than Amsterdam, Aruba, Brunssum, Coevorden, Eygelshoven, The Hague, Heerlen, Hoensbroek, Hulsberg, Kerkrade, Landgraaf, Maastricht, Margraten, Papendrecht, Rotterdam, Schaesburg, Schinnen, Schiphol, and Ypenburg||111.23||40,600|
|All cities other than Oslo and Stavanger||103.29||37,700|
|All cities other than Doha||88.77||32,400|
|All cities other than Barcelona, Madrid, Rota, Seville, Seville Province, and Valencia||83.01||30,300|
|All cities other than Bern, Geneva, and Zurich||90.14||32,900|
|Tanzania||Dar Es Salaam||120.55||44,000|
|Trinidad and Tobago||Port of Spain||149.32||54,500|
|United Arab Emirates||Abu Dhabi||136.13||49,687|
|United Kingdom (continued)||Liverpool||109.04||39,800|
|All cities other than Basingstoke, Bath, Belfast, Birmingham, Bracknell, Bristol, Brookwood, Brough, Cambridge, Caversham, Chelmsford, Cheltenham, Chicksands, Croughton, Dunstable, Edinburgh, Edzell, Fairford, Farnborough, Felixstowe, Ft. Halstead, Gibraltar, Glenrothes, Greenham Common, Harrogate, High Wycombe, Hythe, Kemble, Lakenheath, Liverpool, London, Loudwater, Menwith Hill, Mildenhall, Nottingham, Oxfordshire, Plymouth, Portsmouth, Reading, Rochester, Samlesbury, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire||121.10||44,200|
|Ho Chi Minh City||115.07||42,000|
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