# retired u.s. citizen living abroad



## crisvic (Jan 25, 2020)

Good afternoon..U.S. citizen living permanently abroad gets two social security pensions. $16000 from the country he,s a dual national, Spain.. and $10500 from the U.S. He only uses form 1116 to lower his taxes....could he also use form 2555 to deduct housing expenses..? or form 2555 is only for earned income? Thanks so much


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## Bevdeforges (Nov 16, 2007)

I believe the FEIE (form 2555) only concerns "earned income" - i.e. salary and wages income. Pensions are specifically excluded from form 2555 consideration. I believe (though I'm not certain) that Housing Expenses on form 2555 only pertain to expenses related to someone working (and drawing a salary) overseas. Not to pension income.


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## Moulard (Feb 3, 2017)

The housing deduction is not dependent on having foreign earned income, however it does have the same eligibility requirements. Tax home + either bona fide resident or physical presence.

1 form, 2 purposes because both are part of § 911.

Also worth noting that just because you have elected to to take the foreign tax credit general category in the last 5 years does not mean you cannot use the foreign housing deduction, even though you are likely to be unable to exclude foreign earned income on the same form.

The maximum amount excludable under the foreign housing exclusion is limited to the lesser of an individual’s qualified housing expenses for the year or the housing limit, minus the base amount. The limit on housing expenses is generally 30% of the maximum FEIE amount , but may be more in certain “high cost” areas. 

The base amount is 16% of the maximum FEIE amount. 

So unless your housing expenses, are above 16k then you won't get any benefit out of it.


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## crisvic (Jan 25, 2020)

tyanks so much


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