# Foreign Earned Income exemption question



## jpm500 (Feb 16, 2013)

Hi All,

I left US on April 1, 2012 and have been overseas until now (except for a brief 10 day trip back in December). 

I'll also will be out of US for all of 2013.

Can I take advantage of the Foreign Earned Income exemption since I've been out of US for 9/12 months? Or at least part of the exemption?

Please advice.

Thanks!


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## Bevdeforges (Nov 16, 2007)

Yes, you can take the FEIE on earnings while overseas - but you cannot file your tax return for 2012 until April 1st at the earliest. Luckily, taxpayers living overseas have an automatic deadline extension to June 15th, so you're ok. Fill out the forms now, if you like, but don't send them in (or attempt to e-file them) until April 2nd or later.

You have to have completed your 12 consecutive months of physical presence outside the US before you can file a return where you claim the FEIE. For 2013, you can use the bona fide resident test, if you meet the requirements (requires residence for an entire calendar year, whereas the physical presence test only requires 12 consecutive months of being outside the US).
Cheers,
Bev


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## jpm500 (Feb 16, 2013)

Hey Bev,

I saw your helpful replies elsewhere and was hoping you answer my question, thanks!

"You have to have completed your 12 consecutive months of physical presence outside the US before you can file a return where you claim the FEIE. "

I thought it was 330/365 days or something like?

On April 2, 2013 I will be outside the US for 355 days out of 365. Should that be good enough for the extension, or did I need to be out of US from Jan - Dec 2012?

I'm still a bit confused how the exemption is counted.

And I will be using the physical test (not the residence test).


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## Bevdeforges (Nov 16, 2007)

No - you're making it too complicated. There are two tests to see if you qualify for the FEIE. If you meet either of them, you can take the exclusion for the time you were outside the country.

The physical presence test does indeed require that you have been physically present outside the US for 330 days in a 365 day period. That period must consist of a run of 12 consecutive months - as, in your case, April 1, 2012 to March 31, 2013. The trick is that you can't file your 2012 tax return in February (say), because at that point you have not met the 330 days in a 12 month consecutive period test. (You could always slip back into the US for the month of March and blow your physical presence test.)

I know this because I missed the physical presence test one time. Had moved to Europe in late October, intending to remain for 18 months. The employer was paying to have my taxes filed for me, and at June 15th, they filed for an extension to something like December 1st, giving the reason that I reasonably expected to qualify for the FEIE based on the physical presence test. Then, my employer pulled me back home in September - about six weeks before I came up on that one year mark.

The tax people filed my tax return for the year they had gotten the extension for, saying that "unforeseen circumstances" came up and so, while I had honestly believed I'd be eligible for the FEIE, it turned out I wasn't. 

So that's why you can't file your return until the one year anniversary of your arrival overseas.

You will still file for calendar year 2012, and you can only apply the FEIE to the period from April 1st to December 31st. In 2013, you take the FEIE for the full year, as long as you're still there through December 31st.

Publication 54 explains this and may well have an example you can follow.
Cheers,
Bev


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## manny.j (Dec 4, 2011)

Bevdeforges said:


> No - you're making it too complicated. There are two tests to see if you qualify for the FEIE. If you meet either of them, you can take the exclusion for the time you were outside the country.
> 
> *The physical presence test does indeed require that you have been physically present outside the US for 330 days in a 365 day period. That period must consist of a run of 12 consecutive months - as, in your case, April 1, 2012 to March 31, 2013. The trick is that you can't file your 2012 tax return in February (say), because at that point you have not met the 330 days in a 12 month consecutive period test. (You could always slip back into the US for the month of March and blow your physical presence test.)*
> 
> ...


Bev: It will not be until 5th May 2013 when I have moved to the UK for excatly 1 year. However...I had to visit the US for 3 weeks (21 days) because of work. So on 5th May 2013, will this disrupt this physical presence test even though I will be out of the US for more than 330 days out of 365?


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## Bevdeforges (Nov 16, 2007)

manny.j said:


> Bev: It will not be until 5th May 2013 when I have moved to the UK for excatly 1 year. However...I had to visit the US for 3 weeks (21 days) because of work. So on 5th May 2013, will this disrupt this physical presence test even though I will be out of the US for more than 330 days out of 365?


Three weeks is only 21 days. On the 5th of May, you will have spent 344 days out of the prior 365 days outside the country. Bingo - you've passed the physical presence test!
Cheers,
Bev


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