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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
(WEP). For more information about the WEP, go to SSA.gov/
International/WEP_Intro.html.
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Interest, ordinary dividends, capital gains, alimony, etc.
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Amounts paid to you by the U.S. Government or any of its
agencies if you were an employee of the U.S. Government or any
of its agencies.
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Amounts received after the end of the tax year following the
tax year in which you performed the services.
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Amounts you must include in gross income because of your
employer’s contributions to a nonexempt employees’ trust or to a
nonqualified annuity contract.
Income received in prior year. Foreign earned income
received in 2022 for services you performed in 2023 can be
excluded from your 2022 gross income if, and to the extent, the
income would have been excludable if you had received it in
2023. To claim the additional exclusion, you must amend your
2022 tax return. To do this, file Form 1040-X.
Income earned in prior year. Foreign earned income received
in 2023 for services you performed in 2022 can be excluded
from your 2023 gross income if, and to the extent, the income
would have been excludable if you had received it in 2022.
If you are excluding income under this rule, do not include this
income in Part IV. Instead, attach a statement to Form 2555
showing how you figured the exclusion. Enter the amount that
would have been excludable in 2022 on Form 2555 to the left of
line 45. Next to the amount, enter “Exclusion of Income Earned
in 2022.” Include it in the total reported on line 45.
Note. If you claimed any deduction, credit, or exclusion on your
2022 return that is definitely related to the 2022 foreign earned
income you are excluding under this rule, you may have to
amend your 2022 income tax return to adjust the amount you
claimed. To do this, file Form 1040-X.
Line 20. If you engaged in an unincorporated trade or business
in which both personal services and capital were material
income-producing factors, a reasonable amount of
compensation for your personal services will be considered
earned income. The amount treated as earned income, however,
can't be more than 30% of your share of the net profits from the
trade or business after subtracting the deduction for the
employer-equivalent portion of self-employment tax.
If capital is not an income-producing factor and personal
services produced the business income, the 30% rule does not
apply. Your entire gross income is earned income.
Line 23. List other foreign earned income not included on lines
19 through 22. You can enter “Various” on the dotted lines to the
left of the entry space if you have other foreign earned income
from multiple sources.
Line 25. Enter the value of meals and/or lodging provided by, or
on behalf of, your employer that is excludable from your income
under section 119. To be excludable, the meals and lodging
must have been provided for your employer's convenience and
on your employer's business premises. In addition, you must
have been required to accept the lodging as a condition of your
employment. If you lived in a camp provided by, or on behalf of,
your employer, the camp may be considered part of your
employer's business premises. See
Exclusion of Meals and
Lodging in Pub. 54 for details.
Part VI
Line 28. Enter the total reasonable expenses paid or incurred
during the tax year by you, or on your behalf, for your foreign
housing and the housing of your spouse and dependents if they
lived with you. You can also include the reasonable expenses of
a second foreign household (defined later). Housing expenses
are considered reasonable to the extent they aren't lavish or
extravagant under the circumstances.
Housing expenses include rent, utilities (other than telephone
charges), real and personal property insurance, nonrefundable
fees paid to obtain a lease, rental of furniture and accessories,
residential parking, and household repairs. You can also include
the fair rental value of housing provided by, or on behalf of, your
employer if you haven't excluded it on line 25.
Don't include deductible interest and taxes, any amount
deductible by a tenant-stockholder in connection with
cooperative housing, the cost of buying or improving a house,
principal payments on a mortgage, or depreciation on the house.
Also, don't include the cost of domestic labor, pay television, or
buying furniture or accessories.
Include expenses for housing only during periods for which:
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The value of your housing isn't excluded from gross income
under section 119 (unless you maintained a second foreign
household, as defined later), and
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You meet the tax home test and either the bona fide residence
or physical presence test.
Second foreign household. If you maintained a separate
foreign household for your spouse and dependents at a place
other than your tax home because the living conditions at your
tax home were dangerous, unhealthful, or otherwise adverse,
you can include the expenses of the second household on
line 28.
Married couples. The following rules apply if both you and your
spouse qualify for the tax benefits of Form 2555.
Same foreign household. If you and your spouse lived in the
same foreign household and file a joint return, you must figure
your housing amounts (line 33) jointly. If you file separate returns,
only one spouse can claim the housing exclusion or deduction.
In figuring your housing amount jointly, either spouse (but not
both) can claim the housing exclusion or housing deduction.
However, if you and your spouse have different periods of
residence or presence, and the one with the shorter period of
residence or presence claims the exclusion or deduction, you
can claim as housing expenses only the expenses for that
shorter period. The spouse claiming the exclusion or deduction
can aggregate the housing expenses of both spouses, subject to
the limit on housing expenses (line 29b), and subtract his or her
base housing amount.
Separate foreign households. If you and your spouse lived
in separate foreign households, you each can claim qualified
expenses for your own household only if:
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Your tax homes weren't within a reasonable commuting
distance of each other, and
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Each spouse's household wasn't within a reasonable
commuting distance of the other spouse's tax home.
Otherwise, only one spouse can claim his or her housing
exclusion or deduction. This is true even if you and your spouse
file separate returns.
See Pub. 54 for additional information.
Line 29a. Enter the city or other location (if applicable) and the
country where you incurred foreign housing expenses during the
tax year only if your location is listed in the table at the end of
these instructions; otherwise, leave this line blank.
Line 29b. Your housing expenses may not exceed a certain
limit. The limit on housing expenses varies depending upon the
location in which you incur housing expenses. In 2023, for most
locations, this limit is $36,000 (30% of $120,000) if your
qualifying period includes all of 2023 (or $98.63 per day if the
number of days in your qualifying period that fall within your 2023
tax year is less than 365). Eligible housing amounts for exclusion
and deduction are updated yearly and available at
IRS.gov/irb/
2023-13_IRB#NOT-2023-26.
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Instructions for Form 2555 (2023)