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JURISDICTION/US AUTHORITY/IRS TAX YEAR/2025 CLUSTER/US

FEIE Tax Filing — Form 2555

Form 2555 is the IRS form used to claim the Foreign Earned Income Exclusion (FEIE), one of the most powerful tax tools available to US citizens abroad. For tax year 2026, it may allow you to exclude up to $132,900 of foreign-earned income from US taxable income. Filing it correctly — including choosing between Physical Presence and Bona Fide Residence tests, and deciding whether to use FEIE or the Foreign Tax Credit — can make a significant difference to your tax bill.

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APPLICABILITY/WHO THIS IS FOR

Who this is for

✓ US citizens or green card holders living and working outside the United States
✓ Qualifying through the Physical Presence Test (330 days outside the US)
✓ Qualifying through the Bona Fide Residence Test (genuine foreign resident for one full year)
✓ Those whose foreign-earned income is primarily wages or self-employment income
✓ Expats in lower-tax countries where FEIE is more advantageous than the Foreign Tax Credit
FILING RECORD/FORMS THAT MAY APPLY

What this filing may involve

Every situation is different. The forms below commonly apply — your specific filing may vary.

Form 2555 — Foreign Earned Income Exclusion (the core FEIE election form)
Form 1040 — US Individual Income Tax Return) incorporating the Form 2555 exclusion
Foreign Housing Exclusion — may also be claimed on Form 2555 for qualifying housing costs
Form 1116 — Foreign Tax Credit on income not excluded via FEIE
FinCEN Form 114 — FBAR) — if foreign accounts exceeded $10,000 threshold
DOCUMENTS/INFORMATION REQUIRED

Documents usually needed

■ Passport showing entry/exit dates (or travel records/calendar)
■ Foreign employer letter confirming foreign employment and location
■ Pay slips or annual earnings summary from foreign employer
■ Rental receipts or housing cost evidence (for Foreign Housing Exclusion)
■ Prior year Form 2555 (if you previously elected FEIE)
■ Social Security number or ITIN
PROCESS/RETURN ASSEMBLY

How Nomadic.Tax works

AI-assisted preparation with licensed professional review — every time.

1
INFORMATION
We review your travel records and employment situation to determine which qualifying test you meet
2
DOCUMENTS
Our system calculates your optimal exclusion amount, including the Foreign Housing Exclusion where applicable
3
AI PREPARATION
We model FEIE vs Foreign Tax Credit to confirm FEIE is the right choice for your situation
4
PROFESSIONAL REVIEW / E-FILE
A licensed CPA completes and reviews Form 2555, then e-files your complete return
PROFESSIONAL REVIEW/CPA / ACCOUNTANT SIGN-OFF

When human review matters

ⓘ The FEIE election is not always the right choice — in high-tax countries (UK, Germany), the Foreign Tax Credit may be better
ⓘ Once revoked, you cannot re-elect FEIE for 5 years without IRS permission — the initial election matters
ⓘ The Foreign Housing Exclusion has city-specific limits that vary significantly
Authority Guide

Independent research and educational guidance from the Nomadic Tax Institute.

Foreign Earned Income Exclusion: Complete Guide →

Relevant plans

Choose the package that best fits your situation, or view all plans.

Premier
$349
For self-employed nomads, freelancers and platform earners.
  • ✓Everything in Standard
  • ✓Schedule C & SE for self-employment
  • ✓Multiple income sources and currencies
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Most popular

Expat
$499
For Americans living abroad — FEIE, foreign tax credits and FBAR included.
  • ✓Everything in Premier
  • ✓Foreign Earned Income Exclusion (Form 2555)
  • ✓Foreign Tax Credit (Form 1116)
  • ✓FBAR filing (FinCEN 114) included
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REFERENCE/COMMON QUESTIONS

Frequently asked questions about FEIE Tax Filing — Form 2555

What is the FEIE limit for 2026?

The Foreign Earned Income Exclusion limit for tax year 2026 is $132,900. This is indexed for inflation annually — it was $130,000 for 2025 and $126,500 for 2024.

What's the difference between the Physical Presence Test and Bona Fide Residence Test?

The Physical Presence Test requires 330 full days outside the US in any 12-month period — it's objective and based on counting days. The Bona Fide Residence Test requires you to be a genuine resident of a foreign country for at least one full calendar year — it's qualitative and based on intent, ties, and visa status. Many nomads use Physical Presence; long-term expats typically use Bona Fide Residence.

Can I use FEIE and the Foreign Tax Credit together?

Yes, with restrictions. You can't claim FTC on the same dollars excluded via FEIE. However, if your income exceeds $132,900 for tax year 2026, you can exclude the first portion via FEIE and apply FTC to the excess. You can also use FTC on passive income (dividends, interest) that FEIE can't cover.

What happens if I incorrectly claim FEIE?

An incorrect FEIE claim (e.g. not meeting the qualifying tests) can result in the exclusion being disallowed, additional tax owed, interest, and penalties. CPA review is strongly recommended to ensure the qualification tests are properly documented.

Who is this for?

Browse by your situation for tailored guidance and the right package.

US Expats Abroad Americans living abroad who want to exclude foreign-earned income from US tax. See who this is for → US Expats in Europe Expats in Germany, France, Spain and across the EU where FEIE is a key planning tool. See who this is for →

Related filing services

US Expat Tax Filing → View filing service FBAR Filing — FinCEN Form 114 → View filing service Foreign Tax Credit — Form 1116 → View filing service US Tax Filing for Americans with Foreign Companies → View filing service

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