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Level 1
posted Mar 4, 2024 10:21:56 AM

Is there an exclusion exempting from federal taxation the first $X,000.00 paid to U.S. federal contract workers for overseas relief work?

I heard that the 1st $125,000 was tax exempt but I have no basis for knowing. Thanks, 

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1 Best answer
Expert Alumni
Mar 4, 2024 11:28:11 AM

You may be referring to the exemption from taxable income of up to $120,000 in 2023 for income earned while working in a foreign country. In general, to qualify you must be a citizen or resident of the foreign country you are working in or be physically present there for 330 days out of a consecutive 12 month period of time. You can learn more here:  Foreign earned income exclusion

1 Replies
Expert Alumni
Mar 4, 2024 11:28:11 AM

You may be referring to the exemption from taxable income of up to $120,000 in 2023 for income earned while working in a foreign country. In general, to qualify you must be a citizen or resident of the foreign country you are working in or be physically present there for 330 days out of a consecutive 12 month period of time. You can learn more here:  Foreign earned income exclusion