# FEIE and Covid for 2020



## jafthelion (Jun 23, 2020)

Hello all. New user, long time lurker. I hope everyone is well and safe and healthy.

I'm hoping someone can provide some guidance with the new IRS reliefs regarding the foreign earned income exclusion. I tried to read the texts that the IRS put out but confused myself a a bit more 

I am a US citizen based and employed in Japan, but due to the virus, I returned to the US. I do believe that I will still be able to qualify for the foreign income exclusion because of the new relief from the IRS, I believe it is in the procedure 2020-27. My question is this, as I am still working and receiving my salary from my foreign employer while living stateside, will the specific income that I am earning during this pandemic qualify to be excluded? I think I read somewhere that when traveling in the US on business, so long as I do not earn more than $3,000 a day, I am ok. But with everything that is going on, I'm not seeing anything definitive in the IRS publications.

Much obliged for any help, pointers, links, whatever so I can put my mind to rest. Thank you all so very much!


----------



## Moulard (Feb 3, 2017)

RP 2020-27 is indeed the one that describes the FEIE waiver for the 2020 tax year. 

If I read it correctly..

There are three key requirements...

1) that you were required to leave Japan on after February 1, 2020 and before July 15 2020 (at the moment, the option is there for them to extend it)
2) you could reasonably have been expected to have been present in a foreign country for 330 days but for the COVID-19 Emergency 
3) you have met all other eligibility requirements for FEIE qualification.


"Required" is such a loaded word in this context ... the only time one is truely required to leave the country is when one is no longer able to meet the visa requirements or the visa has expired.. but lets set aside that nuance for the time being.

All that the RP is really doing is allowing a "soft" 330 days that includes days where you were not in Japan but reasonably expected that you would be. Nothing else changes.

Any income that you earn in the US is considered US sourced, and is not eligible for the FEIE and is subject to US taxation (even if paid by a Japanese Company). The RP does not change that

You may wish to check the US-Japan tax treaty. 

Some treaties do recognize the dual taxation that will result when a tax resident of a foreign country who is a US citizen has US sourced income. This can result Japan will tax you on the US income as you are a tax resident, and the US taxing because it is US sourced and you are a US citizen or permanent resident.

If the treaty has such a clause to avail yourself of that special tax credit you would need to file a Form 1116 "re-sourced income" category. I do not believe using the re-sourcing category is considered revoking the FEIE as it is income that is not eligible for the FEIE.

May not be the answer you want to hear, but I hope the explanation makes sense.


----------

