If you are a U.S. citizen or resident alien, your income (except for amounts exempt under federal law), including that which is earned outside the U.S., is usually subject to U.S. income tax.

This includes earned income and unearned income, such as:

However, if you meet certain requirements, you are eligible to exclude up to $82,400 ($164,800 for married couples) of your foreign-earned income from U.S. income. This is referred to as the foreign-earned income exclusion.

In order to be eligible for the foreign-earned income exclusion, you must meet the following three requirements:

  1. Your tax home must be in a foreign country. Your tax home is defined as the general area employment, where you are permanently or indefinitely engaged to work as an employee or self-employed individual regardless of where you maintain your family home. Note: Your place of residence can be different from your tax home.
  2. You must have foreign-earned income.
  3. You must be either:

This is a high level description of this provision, and other rules apply that could affect your eligibility to claim the foreign-earned income exclusion. For details, see IRS Publication 54 at www.irs.gov. See also IRS publication 519 to find out if you qualify as a U.S. resident alien for tax purposes. These publications are also available or by calling the IRS at 800-829-3676.

To read more frequently asked tax questions, Are there special benefits for U.S. armed forces personnel?, Does everyone have to file a federal tax return?, How can I make sure I'm ready to file my taxes? and Common Tax Questions Answered.

If you feel you will be unable to file your tax return by the deadline, see Get A Six-Month Tax Extension.

Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA

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