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calpopken
New Member

I did foreign earned income exclusion last year for the 12-month period May 2015-May 2016. I'm assuming I cannot now claim it for an overlapping period (Jan-Dec 2016)?

 
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GeoffreyG
New Member

I did foreign earned income exclusion last year for the 12-month period May 2015-May 2016. I'm assuming I cannot now claim it for an overlapping period (Jan-Dec 2016)?

Actually, the answer to your question is that you can use overlapping dates for different tax years, for purposes of meeting the necessary 330 days required in the "Physical Presence Test."  (Please refer to the IRS Form 2555 instructions, at the link below, for a detailed description of the test.)

https://www.irs.gov/pub/irs-pdf/i2555.pdf


In other words, there is nothing in the rules to say that, simply because you used certain months (or days) to reach the conclusion that you qualified for the Foreign Earned Income Exclusion last year, that you cannot then use some or any of those same months (or days) again this year to satisfy the same test.  The time period used to qualify you for last year is not mutually exclusive of the time period this year.

Thus, if you look at the 2016 tax year independently, and you can meet either the "Physical Presence Test" or the "Bona Fide Residence Test," however you do it, then you can claim the Foreign Earned Income Exclusion via filling out Form 2555.

Thank you for asking this important question.



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