Federal Foreign Earned Income Exclusion (FEIE / § 911) Calculator

How this calculator works

The Foreign Earned Income Exclusion (FEIE) under IRC § 911 is the single most-used federal tax preference among Americans living and working abroad. It lets a U.S. citizen or U.S. resident alien whose tax home is in a foreign country EXCLUDE up to a statutory dollar limit — $133,500 (estimated) for 2026, $130,000 for 2025, $126,500 for 2024 — of foreign earned income from U.S. federal income tax entirely. The exclusion is reported on IRS Form 2555 attached to the standard Form 1040. This calculator models the federal-pure mechanic in one planning view: the inflation-indexed FEIE limit lookup, the two qualifying tests under § 911(d)(1), the strict 330-full-day count, the foreign housing exclusion (or deduction for self-employed taxpayers), the high-cost-locality multiplier, the § 911(f) stack-up effect, and the practical tradeoff with the Foreign Tax Credit under § 901.

Why the FEIE exists

The United States is one of only two countries in the world — the other is Eritrea — that taxes its citizens on WORLDWIDE income regardless of where they live or where the income is earned. A U.S. citizen living and working full-time in Berlin, earning all of her income from a German employer, paying full German income tax and German social-insurance contributions on every euro, still owes U.S. federal income tax on every dollar of that income unless § 911 or the Foreign Tax Credit reduces or eliminates the U.S. liability. Congress added § 911 to the Code in current form via the Economic Recovery Tax Act of 1981 to prevent the most egregious cases of "I already paid full tax in my country of residence; why does the IRS want more?" by carving out roughly the first $133,500 of foreign earned income from the U.S. base entirely. Above that limit, § 901 (the Foreign Tax Credit) generally takes over.

The 2026 limit — $133,500 per person

The FEIE limit is inflation-indexed annually under IRC § 911(b)(2)(D)(ii). The 2026 figure of $133,500 is an estimate based on the projected COLA — the IRS will publish the official Rev. Proc. figure in late 2025 or early 2026. Recent history: $126,500 for 2024 (Rev. Proc. 2023-34), $130,000 for 2025 (Rev. Proc. 2024-40). Married filing jointly couples each qualifying spouse get their OWN FEIE limit on their own foreign earned income — a dual-expatriate couple can exclude up to $267,000 (2 × $133,500) for 2026 if each independently meets the qualifying-test requirements.

Two qualifying tests under § 911(d)(1)

The taxpayer must meet ONE of two tests — the tests are alternatives, not cumulative.

Bona Fide Residence Test (§ 911(d)(1)(A)): U.S. citizen (not generally available to resident aliens) who is a bona fide resident of a foreign country for an uninterrupted period that includes an ENTIRE taxable year. The test is fact-intensive: intent to remain indefinitely, nature of housing (long-term lease vs hotel), family ties in the foreign country, voting and community participation, foreign tax filings as a RESIDENT (not a non-resident), and similar indicia. Brief U.S. trips don't break residence so long as the foreign residence is maintained.

Physical Presence Test (§ 911(d)(1)(B)): U.S. citizen OR U.S. resident alien who is physically present in a foreign country or countries for at least 330 FULL DAYS during any 12-consecutive-month period. The count is strict — see next section.

The 330-day rule (and why it's brutal)

A "full day" under Treas. Reg. § 1.911-2(d) is a 24-hour period beginning at midnight in the foreign country — not a calendar day, not a travel day, not any portion of a day. Time spent in international waters, in international airspace, or in any U.S. location (including most U.S. territories) does NOT count. A taxpayer who is abroad 329 days FAILS the PPT entirely. There is no partial credit, no good-faith exception, no "substantially complied" defense. The 12-month window can be any 12 consecutive months (not necessarily a calendar year) and can straddle two tax years; if it straddles, the FEIE limit is prorated across the years under Treas. Reg. § 1.911-3(d) based on the days falling in each.

Practical advice: track travel obsessively and build a buffer. Target 340+ days abroad, not 330 — that gives 10 days of headroom for a family emergency, a hospitalization, or an unexpected U.S. trip that would otherwise tank the entire year's exclusion.

The tax-home requirement (and the abode-in-the-U.S. trap)

In addition to one of the two qualifying tests, the taxpayer must have a TAX HOME in a foreign country during the qualifying period under § 911(d)(3). Tax home generally means the taxpayer's regular or principal place of business, or the regular place of abode if no principal place of business exists. The trap: a taxpayer with an ABODE in the United States cannot have a foreign tax home, even if the 330-day count is met. "Abode" is a different concept from "tax home" — it's where the taxpayer's domestic, family, and economic ties are anchored. A short-term-assignment expatriate who keeps the family in the U.S. house, returns home for major holidays, maintains a U.S. driver's license and voter registration, and works abroad on rotational temporary postings has a U.S. abode and CANNOT use FEIE. This is the most-litigated issue in § 911 (Lemay, Sochurek, Bujol, and many others). For a clean posture, move the family abroad too, or at minimum break the U.S. abode by ending the lease, selling or renting the U.S. residence long-term, and severing the domestic anchor.

Earned vs passive — what qualifies

§ 911(b)(1) limits the exclusion to amounts received as compensation for personal services actually performed in a foreign country during the qualifying period. Qualifying: wages, salaries, professional fees, commissions, bonuses, tips, employer-paid allowances (housing, education, hardship, COLA), and net earnings from self-employment attributable to services performed abroad. NOT qualifying: dividends, interest, capital gains, rental income, royalties (unless self-created in a foreign country), pension and annuity distributions, social security payments, amounts paid by the U.S. government or any U.S. agency to its employees (§ 911(b)(1)(B)(ii) — Foreign Service officers, military, USAID, Peace Corps stipends), and income received in a year more than ONE year after the year of services performed.

Worked example A — bona fide resident in Berlin

A U.S. software engineer permanently relocated to Berlin, employed by a German GmbH, earning $200,000/year in 2026. Family moved with her; long-term apartment lease; German tax filings as a resident; no U.S. abode. She qualifies under the Bona Fide Residence Test for tax year 2026.

• FEIE limit (2026): $133,500.
• Earned-income exclusion: min($200,000, $133,500) = $133,500.
• Foreign housing cost: $24,000 (modest; below the 16% × $133,500 = $21,360 base by only a small margin).
• Housing excess over base: max(0, $24,000 − $21,360) = $2,640. Below the cap.
• Housing exclusion: $2,640.
• Total excluded: $133,500 + $2,640 = $136,140.
• Taxable foreign income remaining: $200,000 − $136,140 = $63,860.
• § 911(f) stack-up: the $63,860 is taxed at the bracket rate that would apply if the full $200K were included — meaningful incremental U.S. tax even after the exclusion.

Worked example B — digital nomad, $90K self-employed, fully met PPT

A U.S. citizen freelance designer earning $90,000 of self-employment net earnings in 2026, present in foreign countries (Portugal, Spain, Thailand, Mexico) for 340 full days during the calendar year. No U.S. abode. PPT met by a comfortable 10-day margin.

• Earned-income exclusion: min($90,000, $133,500) = $90,000 (fully excluded).
• Taxable foreign income remaining: $0.
• Federal INCOME tax on foreign SE earnings: $0.
• BUT: Schedule SE self-employment tax STILL owed: 15.3% × $90,000 × 92.35% ≈ $12,712 in SECA. The FEIE does not relieve SE tax (IRC § 1401). Without a Totalization Agreement, this is fully owed.

Worked example C — digital nomad falls one day short

Same nomad as Example B but only 300 full days abroad in 2026 (took a 65-day stretch back in the U.S. for a family medical emergency). PPT fails — needs 330, has 300.

• Eligible? NO.
• Earned-income exclusion: $0.
• The full $90,000 is U.S.-taxable as ordinary income.
• Federal income tax on $90K SE income (single filer, 2026): ~$13,500 plus SE tax of ~$12,712 = ~$26,200 total federal exposure.
• The 30 missing days cost roughly $13,500 in federal income tax.

This is why expatriates target 340+ days, not 330. The penalty for missing the count is the entire exclusion.

Worked example D — high-cost London expat

A U.S. attorney on a 2-year secondment to London with a U.K. law firm, earning $150,000 in wages plus $50,000 of employer-paid housing (London rents are not gentle). BFR met (full year of bona fide residence in the U.K.; family relocated; U.K. tax filings as resident).

• Earned-income exclusion: min($150,000 + $50,000, $133,500) = $133,500 (the housing allowance and wages combine in foreign earned income under § 911(b)(1) but the exclusion is capped).
• Housing computation: high-cost-locality multiplier for London ≈ 1.50× (verify against the IRS table for the year).
  • Housing base: 16% × $133,500 = $21,360.
  • Housing cap: 30% × $133,500 × 1.50 = $60,075.
  • Excess of $50K housing over $21,360 base: $28,640.
  • Housing exclusion: min($28,640, $60,075 − $21,360) = min($28,640, $38,715) = $28,640.
• Total excluded: $133,500 + $28,640 = $162,140.
• Taxable foreign income remaining: $200,000 − $162,140 = $37,860.

The high-cost-locality multiplier is what makes London / Tokyo / Hong Kong / Geneva postings economically tolerable from a U.S. tax perspective. Without it, the housing exclusion would cap at $40,050 − $21,360 = $18,690 — and the $50K of housing would mostly land back in the U.S. tax base.

FEIE vs Foreign Tax Credit — which to use

The two relief mechanisms — § 911 (exclusion) and § 901 (credit) — are alternatives and cannot be combined on the same income (the § 911(d)(6) coordination rule).

FEIE wins when foreign tax rates are LOW or ZERO: Dubai, Singapore, Hong Kong (on most types), Bermuda, Cayman, certain digital-nomad jurisdictions. The income simply leaves the U.S. base; the absence of foreign tax doesn't matter.

Foreign Tax Credit wins when foreign tax rates EXCEED U.S. rates: France, Germany (high incomes), Netherlands, Scandinavia, Belgium, Austria. The foreign tax fully offsets U.S. tax, and the "excess credit" can be carried back 1 year or forward 10 years under § 904(c).

Hybrid is common for income ABOVE the FEIE limit: exclude the first ~$133K under § 911 and take a § 901 credit on the foreign tax attributable to income above the limit.

Caution on revocation: the FEIE election under § 911(e) is revocable only with IRS consent, and once revoked, the taxpayer cannot re-elect for 5 years without further IRS consent. Treat the election as a long-term commitment, not a year-by-year flip.

Self-employed: housing is a DEDUCTION (not exclusion), and SE tax is still owed

For self-employed taxpayers, the housing relief under § 911(c)(4) is structured as an above-the-line DEDUCTION on Form 2555 Part IX, not an exclusion from gross income. The math is the same (base, cap, multiplier) but the deduction is limited by net SE earnings and reduces AGI rather than gross income. More important: SELF-EMPLOYMENT TAX UNDER § 1401 IS NOT EXCLUDED. The FEIE relieves INCOME tax; it does not relieve the 15.3% SECA payable on the first ~$176,100 (2026) of net SE earnings. The only relief mechanism for SE tax is a bilateral Totalization Agreement — the U.S. has roughly 30 such agreements (Germany, France, U.K., Japan, Canada, Australia, the Netherlands, most of Western Europe, Korea, Brazil, etc.). An expatriate paying into the foreign social-insurance system can request a Certificate of Coverage that relieves the U.S. SECA obligation. Without a totalization agreement, the SE tax is fully owed on foreign SE earnings.

The § 911(f) stack-up effect

Even where the FEIE eliminates U.S. tax on the excluded portion, the REMAINING (non-excluded) income is taxed at the bracket rate that would apply if the excluded portion were INCLUDED. A taxpayer with $200K of foreign earned income excluding $133,500 has $66,500 of "above-the-line" taxable income — but pays U.S. income tax on that $66,500 at the marginal rate applicable to a $200K taxpayer (24% in 2026 for single filers in the relevant range), not at the lower 12-22% rates that would apply to a fresh $66K filer. Congress added this stack-up rule in TIPRA 2005 specifically to keep high-income expatriates in roughly the same bracket as they would have been on full inclusion. Bracket-creep is not fully neutralized — the FEIE is not a free lunch on the high end.

State tax non-conformity

Even where the FEIE fully removes foreign earned income from the U.S. FEDERAL base, the taxpayer's STATE of residence (or domicile) may not conform. California, New York, New Jersey, Pennsylvania, Massachusetts, and several others either do not conform to § 911 at all or conform only partially — the full foreign earned income remains state-taxable. The states with no income tax (Florida, Texas, Tennessee, Washington, Nevada, South Dakota, Wyoming, Alaska, and New Hampshire on wages) effectively conform by having no state tax. Many expatriates re-domicile to a no-tax state before a long foreign assignment specifically to neutralize this overhang. The state of departure (especially California's FTB) scrutinizes domicile changes aggressively when a foreign-income shelter is at stake — establish genuine domicile in the new state with documented intent before claiming the benefit.

Common errors

• Counting partial days for the PPT. A "full day" is midnight-to-midnight in the foreign country.
• Confusing tax home with abode. Tax home is the business location; abode is the family-and-economic anchor. The taxpayer needs BOTH a foreign tax home AND no U.S. abode.
• Trying to combine FEIE with FTC on the same income (§ 911(d)(6) prohibits this).
• Forgetting Schedule SE for self-employed expatriates. FEIE doesn't touch SE tax.
• Missing the stack-up rule when computing the federal tax on the non-excluded portion.
• Assuming state conformity. Always verify the state-of-residence treatment separately.
• Revoking and re-electing in the same 5-year window without IRS consent (§ 911(e)).
• Treating government wages as eligible. § 911(b)(1)(B)(ii) excludes U.S. government employee compensation from foreign earned income.

Tools, not advice. Verify the qualifying-test facts, the IRS high-cost-locality table for the year of computation, and the state-tax treatment in the taxpayer's state of residence before filing Form 2555.