US Citizens

When US citizens work abroad, they may qualify for the foreign earned income exclusions.

Bona Fide Residence

Qualifying for the foreign earned income exclusions under the Bona Fide Residence Test (BFR) requires that you be a tax resident in that country for an entire calendar year. This means that you have not submitted a statement of nonresidence to that country and be subject to income taxation there. The facts and circumstances of your situation will be a determining factor. The FAQ below explain these requirements in more detail as well note situations where a person will not qualify under BFR.

Can I claim bona fide residence in my year of arrival?

You can claim the exclusions using the bona fide residence test in the year of arrival although you need to have been a tax resident of the foreign country for an entire calendar year before you file your return.

Often, individuals initially minimize US travel so that the exclusions can be claimed using the physical presence test. Once the qualifications of BFR have been met, less attention is needed to the number of days in the states. See our PPT page for information on how to qualify under this test.

Is travel in and out of the US a factor when claiming BFR?

Your US travel is not a specific factor when claiming bona fide residence. BFR is often the only test available to business developers and managers who are often called to the US for business meetings.

While not a factor, significant US travel can be an indication that you have not met the tax home requirements discussed on our general questions page.

My tax return is due but I have not yet been overseas for a full calendar year? What do I do?

You must meet the full calendar year period before you file your tax return. The IRS has a special extension form just for individuals in this situation. See our extensions page for more information and pay special note to the Form 2350 discussion. If you are a tax resident of a foreign country for part of Year 1 continue to meet the requirements for all of Year 2, then you can request an extension to January 30 of Year 3.

As a green card holder, can I claim the bona fide residence test?

Maybe. While 911(d)(1)(A) limits the bona fide residence test to US citizens, the IRS ruled that BFR may be available to some nationals and/or tax residents of certain treaty countries. See Rev. Rul. 91-58 for more information on how a green card holder may use the nondiscrimination clause of a particular treaty.

The physical presence test is not limited to US citizens. Foreign nationals tax resident in the US, such as a person with a green card/ permanent resident visa, may claim the exclusions using PPT.