Question

To qualify for the foreign earned income exclusion, an expatriate employee must meet one of the following requirements: 1--The physical presence test only. 2--The bona fide residence test only. 3--The physical presence test and the bona fide residence test together. 4--Either the physical presence or the bona fide residence test.

Answer 1

To qualify for the foreign earned income exclusion, an expatriate employee must meet

Ans ( 4-)-Either the physical presence or the bona fide residence test.

Physical Presence Test: If any person moved to overseas and does not plan to return back to USA it opts physical presence test.

Bona fide resident test: If US expatriates who plan to live overseas for 11 months or more must use bona fide resident test.

An individual need to meet the physical presence test requirements each year to qualify for foreign tax exclusion.