bonafide residence test for PhD student

[greta3]

I am a PhD student in the UK, and I started in 2021 on a student visa that lasts for 5 years. For the past two years, I have qualified for the Foreign Earned Income Exclusion with the physical presence test. In 2024, I will not pass the physical presence test beacuse I will be on vacation in the US for 2 months and researching for 3 months at a US institution as a part of my PhD. I plan to return to the UK after my US research placement to complete my PhD. After my PhD, I may stay and in the UK on a graduate or individual visa for work. Will I pass the bonafide residence test in 2024? 

[Anonymous_]

I'll page @pk

[SusanY1]

Maybe.  It sounds more likely that you are a bona fide resident of the UK for the part of the year before your return to the US than for the full year, but it depends a lot on the total set of your facts and circumstances. 

As long as you already had a full tax year of uninterrupted residence abroad, you can be considered a bona fide resident for part of the year.

You can also use the physical presence test if you use the 330 days that begin once you return to the UK and are present 330 of 365 days after your return.  In this case, the exclusion is pro-rated based on the days you spend out of the US, and you wouldn't be able to file your tax return until after you satisfy the test.

You would file an extension through at least October 15, 2024, but you may qualify for an approved additional extension to allow you time to meet the test.  

Aside from the initial requirement to spend an uninterrupted period that includes an entire tax year, qualifying as a bona fide resident becomes a bit subjective.  Is it your clear intent to return to life outside of the US "indefinitely"? (not necessarily permanently) Did you maintain permanent living quarters abroad during your time in the US?  Are your "closer ties" to the UK or the US (your social circle, house of worship, primary banking relationships, etc.)

Being considered a bona fide resident for part of the year will seems the most likely rather than being a bona fide resident for the entirety of 2024. 
 

Any income you earn while in the US will not be excluded in any case.

If you are paying tax to the UK on your earnings there you may wish to consider using the tax credit method to figure your tax - but take care with this.  Failure to take the foreign earned income exclusion when you're qualified to do so is considered a revocation which then makes you ineligible to use the exclusion for a period of 5 years unless you apply for permission to do so from the IRS.

[pk]

@greta3 , while all that @SusanY1  is suggesting , saying is true, please to note that to use  "bonafide resident" test you need IRS approval  and it is usually on a case by case basis.  It is  safer to use the Physical Presence test.  Also note that if you give up physical presence test and opt for  using  foreign tax credit, you cannot come back to using FEIE for a period ( five years ).  Strongly suggest  "read up and weigh your options"  with an eye to your longer term  goal/plans.

Is there more  one of us can do for you n?

pk