Benefits of our foreign earned income calculator

What Is the Foreign Earned Income Exclusion (FEIE)?

How do you qualify for the Foreign Earned Income Exclusion?

To unlock the FEIE, you only need to pass one of two IRS tests. Pick the route that best matches your travel pattern – and remember that passing either test lets you qualify for the foreign earned income exclusion FEIE without double‑tax pain.

Physical Presence Test

You must be physically present outside the United States for 330 full days within a period of 12 consecutive months. A "full day" starts at midnight, so flight time over international waters doesn't count.

Example: A short‑term contractor – spending March 1 to February 28 abroad with only two week‑long visits home – hits 332 qualifying days and sails through the test. Contrast that with a remote employee who works six months in Spain and six in Texas; they fall short and must look to the next test.

Bona Fide Residence Test

Live like a true resident of a foreign country for an entire calendar year – this longer‑term path, known as the Bona Fide test, often suits retirees, digital‑nomad families, or executives posted overseas.

Maintain a legal home abroad (rental or owned) and register locally for utilities, voting, or resident visas.
Show intent to stay: enroll kids in school, join clubs, shift banking relationships.
Limit US ties: short visits are fine, but keep a clear centre of life overseas.

Frequently asked questions

1. How do I qualify for the Foreign Earned Income Exclusion?

You qualify by passing either the physical presence test – 330 full days abroad in any 12‑month window – or the bona fide residence test for a full tax year.

2. What is the maximum exclusion amount for 2025?

For 2025, the maximum exclusion is $130,000, or $260,000 if both spouses qualify separately.

3. Can I claim both the Foreign Earned Income Exclusion and the Foreign Tax Credit?

You can pair the exclusion with the Foreign Tax Credit on different income streams, but never apply both to the same earnings.

4. Can I use the FEIE if I'm self‑employed?

Self‑employed Americans may use the FEIE to shield their net foreign profits, though they still owe self‑employment tax absent a totalization agreement.

5. What counts as foreign earned income?

Foreign earned income covers wages, salaries, and self‑employment fees for services performed abroad, while investment income, pensions, and capital gains are excluded.

6. Do I need to file a special form to claim the FEIE?

Yes – you must attach Form 2555 to your Form 1040, and a good foreign income exclusion calculator can streamline the figures.

7. What happens if I don't meet the 330‑day requirement by year‑end?

If you fall short of 330 days, you can amend once you qualify, rely on the bona fide residence test, or forgo the exclusion for that year.

Foreign Earned Income Exclusion calculator