Certain U.S. citizens or resident aliens, specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, may now qualify for the foreign earned income exclusion.
Service in a combat zone.
Citizens or residents of the United States serving in an area designated by the President of the United States by Executive order as a combat zone for purposes of section 112 in support of the U.S. Armed Forces can qualify as having a tax home in a foreign country, even if they have an abode within the United States. For a list of IRS recognized combat zones, go to IRS.gov/Newsroom/Combat-Zones.
This can be done in TurboTax by adding Form 2555, which is available for e-file.
Here's how to add—or remove—a Form 2555 or 2555-EZ from your return: Why use Form 2555?
- Sign into TurboTax and open or continue your return.
- Do a search for foreign income, and then select the Jump to link in the search results.
- Continue through the foreign income section until you reach the screen Would You Like to Try and Exclude Your Foreign Earned Income? (if single), or Whose Foreign Income Would You Like to Try and Exclude? (if married). Answer Yes (to add a 2555 or 2555-EZ—we'll figure out which one you need) or No (to remove it), select Continue, and follow any on-screen instructions.
Tip: The -T or -S suffix after the 2555 stands for taxpayer or spouse, respectively.
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