Yes, it does. this is how you get taxable compensation that allows you to contribute to an IRA. As I mentioned in the beginning, one of the drawbacks of using FEIE is that you cannot contribute to an IRA. However, if you go one of these other routes, you may have taxable compensation that does allow you to contribute to an IRA. This happens with certainty using only foreign tax credit, and if you use the foreign housing exclusion you may qualify and still not owe tax if the excess above is under the standard deduction amount. The income that is subject to the standard deduction is "taxable compensation" for purposes of determining an IRA contribution while the income excluded under foreign housing or foreign income exclusions is not.
I am sorry if the connection wasn't clear, but I did mention the retirement in the beginning paragraph. I admit I didn't link it particularly well in the text. But it IS about contributing to an IRA- and how it can be done if you have only foreign source wages.
@macuser_22
