# FEIE 12 month period start/end



## Jamie D (May 10, 2021)

Hi All! I am a little confused about the FEIE 12 month requirement.

I am aware that it only has to be 12 consecutive months but at the end of them, do you start over? Or is it more rolling? When do you "restart" the 12 month period?

If you are out of the U.S. for 300 days from July, 2020 - July 2021, you can claim those 6 months for 2020 taxes. But at the end of 2021, if you are out of the states for the calendar year for a total of 330 days, can you claim FEIE for the whole year? (Even if you "used" those months for the 2020 claim?)


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## Bevdeforges (Nov 16, 2007)

Jamie D said:


> If you are out of the U.S. for 300 days from July, 2020 - July 2021, you can claim those 6 months for 2020 taxes. But at the end of 2021, if you are out of the states for the calendar year for a total of 330 days, can you claim FEIE for the whole year? (Even if you "used" those months for the 2020 claim?)


Exactly. Your first year outside the US, you most likely will file using the physical presence test (where you need 12 consecutive months outside the country), taking the FEIE for the period from your arrival date to the end of the year, so July 2020 to December 31, 2020 in your example. The "catch" is that you can't file your tax return until after you have fulfilled that 12 consecutive months requirement. So, you have to file for an extension until after the anniversary of your arrival date (and I think you have a month or two after that).

For the 2021 tax year, you can use either the physical presence or the bona fide residence test (the full calendar year one), whichever one you best meet the requirements for. Each year stands on its own so it's not like you've "used" the spill over months.


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## Jamie D (May 10, 2021)

Bevdeforges said:


> Exactly. Your first year outside the US, you most likely will file using the physical presence test (where you need 12 consecutive months outside the country), taking the FEIE for the period from your arrival date to the end of the year, so July 2020 to December 31, 2020 in your example. The "catch" is that you can't file your tax return until after you have fulfilled that 12 consecutive months requirement. So, you have to file for an extension until after the anniversary of your arrival date (and I think you have a month or two after that).
> 
> For the 2021 tax year, you can use either the physical presence or the bona fide residence test (the full calendar year one), whichever one you best meet the requirements for. Each year stands on its own so it's not like you've "used" the spill over months.


SO SO helpful! Thank you!


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## Moulard (Feb 3, 2017)

The other catch with the physical presence test is that you must pro-rate the exemption if you use time from the previous tax year to meet the 330 consecutive days.

So, if for example, you use say a 1 July-31 June period to meet the 12 consecutive months, then the amount you can exclude is effectively halved.

If you have already been out of the US for a full calendar year, then you should look at the bona fide residence test instead of the physical presence test - as it only cares about days in the US on business.


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## Jamie D (May 10, 2021)

Moulard said:


> The other catch with the physical presence test is that you must pro-rate the exemption if you use time from the previous tax year to meet the 330 consecutive days.
> 
> So, if for example, you use say a 1 July-31 June period to meet the 12 consecutive months, then the amount you can exclude is effectively halved.
> 
> If you have already been out of the US for a full calendar year, then you should look at the bona fide residence test instead of the physical presence test - as it only cares about days in the US on business.


Thank you for the response! I don't totally understand. What do you mean by the sentence below? Could I claim July 2020 - December 2020 and then the full year of 2021? I would spend under 35 days in the U.S. from July 2020-June 2021 and also from Jan 2021 - Dec 2021. Thanks!



Moulard said:


> So, if for example, you use say a 1 July-31 June period to meet the 12 consecutive months, then the amount you can exclude is effectively halved.


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## Moulard (Feb 3, 2017)

Lets say, for example you landing outside the US for the first time on 31 June 2020 and were using the period 1 July 2020 to 31 June 2021 as your rolling twelve months and you file your 2020 return some time after 31 June 2021. Because only 183 days of your 12 month period would be in the 2020 tax year you can only exclude 183/366th = 50% of the normal exclusion limit.

As you were physically present outside the US for only half the tax year, you can only exclude half of the maximum amount offered by the exclusion $53,800 rather than $107,600.


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## Jamie D (May 10, 2021)

Moulard said:


> Lets say, for example you landing outside the US for the first time on 31 June 2020 and were using the period 1 July 2020 to 31 June 2021 as your rolling twelve months and you file your 2020 return some time after 31 June 2021. Because only 183 days of your 12 month period would be in the 2020 tax year you can only exclude 183/366th = 50% of the normal exclusion limit.
> 
> As you were physically present outside the US for only half the tax year, you can only exclude half of the maximum amount offered by the exclusion $53,800 rather than $107,600.


Ohhhhh! Perfect! I get it. Thank you!!


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## Moulard (Feb 3, 2017)

Glad to help.

So then the following year, you would be able to claim a 12 month period from 1 Jan - 31 December and thus would be eligible for 100% of the exclusion.

But do bear in mind, that once you have been outside the US for a full calendar year, you can (if you meet the other requirements) swap to the bona fide residence test. 
Once you meet that test (as opposed to the physical presence test), then days in the US do not matter so long as you not do not break your tax residency of the other country.

Once you are a bona fide resident of another country, then conceptually you could spend up to 6 months in the US (the point at which residency tie breaker rules would start to kick in) and be able to exclude all of your income so long as you performed no business activities while in the US.


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## Jamie D (May 10, 2021)

Moulard said:


> Glad to help.
> 
> So then the following year, you would be able to claim a 12 month period from 1 Jan - 31 December and thus would be eligible for 100% of the exclusion.
> 
> ...


Ok, thank you. We will go for that next year. Gratitude!!!


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