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Income excluded by the foreign earned income exclusion does not qualify as compensation for an IRA contribution. If your earned income is $0 because of the FEIE then you are not eligible to contribute to a Roth IRA.

 

Tax Champ @macuser_22 says: ‘The IRS is clear - to be used for an IRA contribution it must be “taxable” compensation. Excluded income is not taxable.’

 

Check out the complete discussion of this issue at Foreign income deduction and IRA contribution in TT.