April 4, 2023 10:14 pm

Physical Presence in Certain Countries Waived for the Foreign Earned Income Exclusion

To be able to exclude foreign earned income and to deduct or exclude foreign housing costs, an individual must be a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year, or be a citizen or resident of the United States who, during any period of 12 consecutive months, is present in a foreign country or countries during at least 330 full days. However, certain adverse conditions may make it impossible for a person to meet either of these conditions. The IRS has listed countries for which eligibility requirements are waived for 2022 (Rev. Proc. 2023-19). These are:

Country                                 Date of Departure On or After

Ethiopia                                 January 3, 2022

Iraq                                         January 14, 2022

Ukraine                                  February 12, 2022

Belarus                                   February 28, 2022

China                                     April 11, 2022

Mali                                        July 29, 2022

To qualify for this relief, an individual must have established residency, or have been physically present, in the foreign country on or before the date that the IRS determines that individuals were required to leave the foreign country. For example, individuals who were first physically present or established residency in Ethiopia after January 3, 2022, are not eligible to qualify for the exception for 2022.

 

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Tax Glossary

Earned income credit

A credit allowed to taxpayers with earned income or adjusted gross income (AGI) below certain thresholds.

More terms