How do I qualify for the foreign earned income exclusion?
U.S. citizens and tax residents may claim the Section 911 exclusion if they meet either of two tests, the Physical Presence Test or the Bonafide Residence Test. To qualify under Physical Presence you must be physically present outside the U.S. for at least 330 of any consecutive 365 day period. Your qualifying period is the consecutive 365 day period. So if you begin your foreign assignment on July 1, 2009 and between January 1 and June 30 of 2010 you are physically present in the U.S. more than 35 days, you are entitled to no exclusion for Year 2009. I have seen people who do not understand this blow the exclusion for their year of arrival or year of return by failing this test. The second test is the Bonafide Residence Test. In order to qualify you need to evidence that you are a true resident of one or more foreign countries for the entire calendar year. Of paramount importance is that you have not made any statements to the foreign immigration or tax authorities to indicate that yo
