Bona Fide Residence Test To Qualify For FEIE

To qualify for the feie exemption, it is important that expats should get through the Bona Fide Residence Test. This test is for the purpose of proving that they have truly set up a residence in their overseas home. If you are a US resident making money from a foreign employment or self-employment in a foreign country, your preparer will use this test for determining whether you are eligible for the exemption.

Will living abroad help you qualify for FEIE?

It is not compulsory that living abroad will automatically help you qualify for this exemption. It is essential that the needs for every exclusion and deduction should be carefully reviewed. As you are an expat, you should not automatically assume that you qualify for the FEIE.


Qualifications for Bona Fide Residence Test for FEIE:

To claim the exclusions and deductions available for expatriates, it is important that you will have to meet each of the following four requirements:

  • It is important that you should be a citizen of the United States. Otherwise, you should be a resident foreigner residing in a nation that has tax agreement with the US.
  • You must have set up a home in a foreign country
  • You must reside in the same country for the entire year
  • You might not have any ideas to get back to the United States or leaving the country of your employment to other countries.

Basically, the requirements of the Bona Fide Resident Test are straightforward, other than the final point above. The reason is that the plans of an expat to return back to the United States cannot be determined. You can still have your residence in the United States, but you should be residing in a country outside the United States and the money you earn in that country will be taxable entirely if you do not qualify for FEIE.

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