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Internal Revenue Bulletin:  2017-13 

March 27, 2017 

Notice 2017–21

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2017


SECTION 1. PURPOSE

This notice provides adjustments to the limitation on housing expenses for purposes of section 911 of the Internal Revenue Code for specific locations for 2017. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States.

SECTION 2. BACKGROUND

Section 911(a) allows a qualified individual to elect to exclude from gross income the foreign earned income and housing cost amount of such individual. The term “housing cost amount” is generally the total of the housing expenses for the taxable year minus a base housing amount. See section 911(c)(1). For this purpose, the housing expenses taken into account are limited to an amount that is tied to the maximum foreign earned income exclusion. Specifically, the limit on such housing expenses equals 30 percent (adjusted as may be provided under the Secretary’s authority under section 911(c)(2)(B)) of the maximum exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. See section 911(c)(2)(A). Thus, under this general limitation, a qualified individual whose entire taxable year is within the applicable period is limited to maximum housing expenses of $30,630 ($102,100 x .30) for 2017.

Similarly, the computation of the base housing amount is also tied to the maximum foreign earned income exclusion. Specifically, the base housing amount is 16% of the maximum exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. See sections 911(c)(1)(B) and 911(d)(1). Assuming that the entire taxable year of a qualified individual is within the applicable period, the base housing amount for 2017 is $16,336 ($102,100 x .16). Section 911(c)(2)(B) authorizes the Secretary to issue regulations or other guidance to adjust the percentage under section 911(c)(2)(A)(i) (which determines the limit on housing expenses) based on geographic differences in housing costs relative to housing costs in the United States. Pursuant to this authority, the Internal Revenue Service (IRS) and the Treasury Department have published annual notices concerning the limitation on the section 911 housing cost amounts since the 2006 taxable year.

For more background on the foreign housing exclusion, see https://www.irs.gov/individuals/international-taxpayers/foreign-housing-exclusion-or deduction.

SECTION 3. TABLE OF ADJUSTED LIMITATIONS FOR 2017

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $30,630) for 2017.

Country Location Limitation on Housing Expenses (full year) Limitation on Housing Expenses (daily)
Angola Luanda 84,000 230.14
Argentina Buenos Aires 56,500 154.79
Australia Melbourne 31,600 86.58
Australia Perth 33,800 92.60
Australia Sydney 63,700 174.52
Austria Vienna 35,400 96.99
Bahamas, The Grand Bahama Island 30,900 84.66
Bahamas, The Nassau 49,700 136.16
Bahrain Bahrain 48,300 132.33
Barbados Barbados 37,700 103.29
Belgium Brussels 38,700 106.03
Belgium Gosselies 33,800 92.60
Belgium Mons 33,800 92.60
Belgium SHAPE/Chievres 33,800 92.60
Bermuda Bermuda 90,000 246.58
Brazil Rio de Janeiro 35,100 96.16
Brazil Sao Paulo 56,600 155.07
Canada Calgary 38,500 105.48
Canada Montreal 51,300 140.55
Canada Ottawa 43,600 119.45
Canada Quebec 34,900 95.62
Canada Toronto 45,600 124.93
Canada Vancouver 43,700 119.73
Cayman Islands Grand Cayman 48,000 131.51
Chile Santiago 40,600 111.23
China Beijing 71,200 195.07
China Hong Kong 114,300 313.15
China Shanghai 57,001 156.17
Colombia Bogota 58,700 160.82
Colombia All cities other than Bogota 49,400 135.34
Costa Rica San Jose 32,000 87.67
Democratic Republic of the Congo Kinshasa 42,000 115.07
Denmark Copenhagen 43,704 119.74
Dominican Republic Santo Domingo 45,500 124.66
Ecuador Guayaquil 30,800 84.38
Ecuador Quito 38,200 104.66
El Salvador San Salvador 32,000 87.67
Estonia Tallinn 46,600 127.67
France Garches 66,400 181.92
France Lyon 36,700 100.55
France Marseille 35,800 98.08
France Paris 66,400 181.92
France Sevres 66,400 181.92
France Suresnes 66,400 181.92
France Versailles 66,400 181.92
France All cities other than Garches, Le Havre, Lyon, Marseille, Montpellier, Paris, Sevres, Suresnes, and Versailles 31,900 87.40
Germany Babenhausen 32,600 89.32
Germany Baumholder 32,300 88.49
Germany Berlin 39,800 109.04
Germany Birkenfeld 32,300 88.49
Germany Boeblingen 39,500 108.22
Germany Bonn 42,000 115.07
Germany Cologne 56,200 153.97
Germany Darmstadt 32,600 89.32
Germany Frankfurt am Main 34,000 93.15
Germany Gelnhausen 41,000 112.33
Germany Giessen 36,000 98.63
Germany Grafenwoehr 32,900 90.14
Germany Hanau 41,000 112.33
Germany Idar-Oberstein 32,300 88.49
Germany Ingolstadt 46,500 127.40
Germany Kaiserslautern, Landkreis 39,800 109.04
Germany Karlsruhe 31,400 86.03
Germany Koblenz 32,000 87.67
Germany Ludwigsburg 39,500 108.22
Germany Mainz 43,400 118.90
Germany Munich 46,500 127.40
Germany Nellingen 39,500 108.22
Germany Neubruecke 32,300 88.49
Germany Ober Ramstadt 32,600 89.32
Germany Pfullendorf 32,000 87.67
Germany Pirmasens 39,800 109.04
Germany Sembach 39,800 109.04
Germany Stuttgart 39,500 108.22
Germany Vilseck 32,900 90.14
Germany Wahn 42,000 115.07
Germany Wiesbaden 43,400 118.90
Germany Zweibrueken 39,800 109.04
Germany 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, 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 Zweibrueken 32,000 87.67
Ghana Accra 36,000 98.63
Greece Athens 32,500 89.04
Greece Elefsis 32,500 89.04
Greece Ellinikon 32,500 89.04
Greece Mt. Parnis 32,500 89.04
Greece Mt. Pateras 32,500 89.04
Greece Nea Makri 32,500 89.04
Greece Piraeus 32,500 89.04
Greece Tanagra 32,500 89.04
Guatemala Guatemala City 41,800 114.52
Guinea Conakry 51,300 140.55
Guyana Georgetown 35,000 95.89
Holy See, The Holy See, The 44,200 121.10
Hungary Budapest 32,500 89.04
Hungary Papá 44,500 121.92
India Mumbai 67,920 186.08
India New Delhi 56,124 153.76
Indonesia Jakarta 37,776 103.50
Ireland Dublin 38,400 105.21
Israel Tel Aviv 50,800 139.18
Italy Genoa 41,800 114.52
Italy Gioia Tauro 31,200 85.48
Italy La Spezia 40,400 110.68
Italy Milan 66,000 180.82
Italy Naples 44,300 121.37
Italy Parma 33,500 91.78
Italy Pordenone-Aviano 34,300 93.97
Italy Rome 44,200 121.10
Italy Turin 33,100 90.68
Italy Vicenza 36,000 98.63
Jamaica Kingston 41,200 112.88
Japan Atsugi 38,200 104.66
Japan Camp Zama 38,200 104.66
Japan Chiba-Ken 38,200 104.66
Japan Fussa 38,200 104.66
Japan Gifu 74,300 203.56
Japan Haneda 38,200 104.66
Japan Kanagawa-Ken 38,200 104.66
Japan Komaki 74,300 203.56
Japan Machidi-Shi 38,200 104.66
Japan Nagoya 74,300 203.56
Japan Okinawa Prefecture 53,000 145.21
Japan Osaka-Kobe 90,664 248.39
Japan Sagamihara 38,200 104.66
Japan Saitama-Ken 38,200 104.66
Japan Sasebo 32,000 87.67
Japan Tachikawa 38,200 104.66
Japan Tokyo 85,700 234.79
Japan Tokyo-to 38,200 104.66
Japan Yokohama 47,000 128.77
Japan Yokosuka 44,900 123.01
Japan Yokota 36,500 100.00
Kazakhstan Almaty 48,000 131.51
Korea Camp Colbern 54,200 148.49
Korea Camp Market 54,900 150.41
Korea Camp Mercer 54,200 148.49
Korea K-16 54,900 150.41
Korea Kimpo Airfield 54,900 150.41
Korea Munsan 31,500 86.30
Korea Osan AB 34,300 93.97
Korea Pyongtaek 39,200 107.40
Korea Seoul 54,900 150.41
Korea Suwon 54,900 150.41
Korea Taegu 33,400 91.51
Korea Tongduchon 35,200 96.44
Kuwait Kuwait City 64,400 176.44
Kuwait All cities other than Kuwait City 57,700 158.08
Luxembourg Luxembourg 36,200 99.18
Macedonia Skopje 35,400 96.99
Malaysia Kuala Lumpur 46,200 126.58
Malaysia All cities other than Kuala Lumpur 33,700 92.33
Malta Malta 55,100 150.96
Mexico Mazatlan 31,000 84.93
Mexico Merida 37,900 103.84
Mexico Mexico City 47,900 131.23
Mexico Monterrey 33,200 90.96
Mexico 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 39,400 107.95
Mozambique Maputo 39,500 108.22
Namibia Windhoek 32,100 87.95
Netherlands Amsterdam 52,900 144.93
Netherlands Aruba 36,000 98.63
Netherlands Brunssum 32,400 88.77
Netherlands Eygelshoven 32,400 88.77
Netherlands Hague, The 52,700 144.38
Netherlands Heerlen 32,400 88.77
Netherlands Hoensbroek 32,400 88.77
Netherlands Hulsberg 32,400 88.77
Netherlands Kerkrade 32,400 88.77
Netherlands Landgraaf 32,400 88.77
Netherlands Maastricht 32,400 88.77
Netherlands Papendrecht 31,700 86.85
Netherlands Rotterdam 31,700 86.85
Netherlands Schaesburg 32,400 88.77
Netherlands Schinnen 32,400 88.77
Netherlands Schiphol 52,900 144.93
Netherlands Ypenburg 52,700 144.38
Netherlands 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 31,300 85.75
Netherlands Antilles Curacao 45,800 125.48
New Zealand Auckland 35,700 97.81
New Zealand Christchurch 32,100 87.95
New Zealand Wellington 33,800 92.60
Nicaragua Managua 31,800 87.12
Nigeria Abuja 36,000 98.63
Norway Oslo 35,200 96.44
Oman Muscat 41,300 113.15
Panama Panama City 35,500 97.26
Paraguay Asuncion 31,100 85.21
Peru Lima 39,100 107.12
Philippines Cavite 34,000 93.15
Philippines Manila 37,380 102.41
Portugal Alverca 40,400 110.68
Portugal Lisbon 40,400 110.68
Qatar Al Udeid (in All Cities) 32,400 88.77
Qatar Doha 42,744 117.11
Qatar All cities other than Doha 32,400 88.77
Russia Moscow 108,000 295.89
Russia Saint Petersburg 60,000 164.38
Russia Sakhalin Island 77,500 212.33
Russia Vladivostok 77,500 212.33
Russia Yekaterinburg 47,400 129.86
Rwanda Kigali 31,500 86.30
Saudi Arabia Jeddah 30,667 84.02
Saudi Arabia Riyadh 40,000 109.59
Singapore Singapore 75,900 207.95
Slovenia Ljubljana 46,400 127.12
South Africa Pretoria 39,300 107.67
Spain Barcelona 40,600 111.23
Spain Madrid 53,900 147.67
Spain Rota 32,900 90.14
Spain Valencia 31,000 84.93
Suriname Paramaribo 33,000 90.41
Switzerland Bern 63,000 172.60
Switzerland Geneva 90,600 248.22
Switzerland Zurich 39,219 107.45
Switzerland All cities other than Bern, Geneva, and Zurich 32,900 90.14
Taiwan Taipei 46,188 126.54
Tanzania Dar Es Salaam 44,000 120.55
Thailand Bangkok 59,000 161.64
Trinidad and Tobago Port of Spain 54,500 149.32
Turkey Izmir-Cigli 31,600 86.58
Turkey Yamanlar 31,600 86.58
Ukraine Kiev 72,000 197.26
United Arab Emirates Abu Dhabi 49,687 136.13
United Arab Emirates Dubai 57,174 156.64
United Kingdom Basingstoke 41,099 112.60
United Kingdom Bath 41,000 112.33
United Kingdom Bracknell 62,100 170.14
United Kingdom Bristol 31,300 85.75
United Kingdom Brookwood 34,300 93.97
United Kingdom Cambridge 40,700 111.51
United Kingdom Caversham 73,800 202.19
United Kingdom Cheltenham 49,600 135.89
United Kingdom Croughton 35,000 95.89
United Kingdom Fairford 34,000 93.15
United Kingdom Farnborough 54,700 149.86
United Kingdom Felixstowe 32,900 90.14
United Kingdom Gibraltar 44,616 122.24
United Kingdom Harrogate 36,800 100.82
United Kingdom High Wycombe 62,100 170.14
United Kingdom Huntingdon 34,300 93.97
United Kingdom Kemble 34,000 93.15
United Kingdom Lakenheath 43,900 120.27
United Kingdom Liverpool 30,900 84.66
United Kingdom London 68,700 188.22
United Kingdom Loudwater 54,200 148.49
United Kingdom Menwith Hill 36,800 100.82
United Kingdom Mildenhall 43,900 120.27
United Kingdom Oxfordshire 34,500 94.52
United Kingdom Plymouth 34,500 94.52
United Kingdom Portsmouth 34,500 94.52
United Kingdom Reading 62,100 170.14
United Kingdom Rochester 35,400 96.99
United Kingdom Samlesbury 34,300 93.97
United Kingdom Southampton 44,200 121.10
United Kingdom Surrey 48,402 132.61
United Kingdom Waterbeach 35,300 96.71
United Kingdom Wiltshire 32,800 89.86
United Kingdom 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, Huntingdon, Hythe, Kemble, Lakenheath, Liverpool, London, Loudwater, Menwith Hill, Mildenhall, Nottingham, Oxfordshire, Plymouth, Portsmouth, Reading, Rochester, Samlesbury, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire 34,300 93.97
Venezuela Caracas 57,000 156.16
Vietnam Hanoi 46,800 128.22
Vietnam Ho Chi Minh City 42,000 115.07

SECTION 4. ELECTION TO APPLY 2017 ADJUSTED LIMITATIONS TO 2016 TAXABLE YEAR

For some locations, the limitation on housing expenses provided in Section 3 of this notice may be higher than the limitation on housing expenses provided in the “Table of Adjusted Limitations for 2016” in Notice 2016–21. A qualified individual incurring housing expenses in such a location during 2016 may apply the adjusted limitation on housing expenses provided in Section 3 of this notice for 2016 in lieu of the amounts provided in the “Table of Adjusted Limitations for 2016” in Notice 2016–21 (and as set forth in the Instructions to Form 2555, Foreign Earned Income, for 2016).

The Treasury Department and the IRS anticipate that future annual notices providing adjustments to housing expense limitations will make a similar election available to qualified individuals that incur housing expenses in the immediately preceding year. For example, when adjusted housing expense limitations for 2018 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2017 taxable year.

SECTION 5. Filing Prior Year or Amended Tax Returns

Notice 2011–8, 2011–1 C.B. 503; Notice 2012–19, 2012–1 C.B. 440; Notice 2013–31, 2013–1 C.B. 1099; Notice 2014–29, 2014–1 C.B. 991; Notice 2015–33, 2015–18 I.R.B. 934; and Notice 2016–21, 2016–1 C.B. 465, are relisted to assist those individuals who are filing prior year or amended tax returns.

EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2006–87, 2006–2 C.B. 766; Notice 2007–25, 2007–1 C.B. 760; Notice 2007–77, 2007–2 C.B. 735; Notice 2008–107, 2008–2 C.B. 1266; Notice 2010–27, 2010–1 C.B. 531; Notice 2011–8, 2011–1 C.B. 503; Notice 2012–19, 2012–1 C.B. 440; Notice 2013–31, 2013–1 C.B. 1099; Notice 2014–29, 2014–1 C.B. 991; Notice 2015–33, 2015–18 I.R.B. 934; and Notice 2016–21, 2016–1 C.B. 465.

EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2017. However, as provided in Section 4, a taxpayer may elect to apply the 2017 adjusted housing limitations contained in Section 3 of this notice to his or her taxable year beginning in 2016.

DRAFTING INFORMATION

The principal author of this notice is Kate Y. Hwa of the Office of Associate Chief Counsel (International). For further information regarding this notice contact Kate Y. Hwa on (202) 317-6934 (not a toll-free number).


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