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IRS adds waiver for 2020 Foreign Earned Income Exclusion (FEIE)

Due to COVID-19, the IRS is allowing taxpayers under certain conditions to meet requirements of the Foreign Earned Income Exclusion (FEIE). The IRS understands that many taxpayers, who had otherwise reasonably expected to remain abroad and meet FEIE requirements, had to return home to the US. As such, the IRS is expanding the range of qualifying events for FEIE during 2019 and 2020.

The qualifying period now includes time spent in the US between Dec 1, 2019 and Jul 15, 2020 for those who left China.

  • December 1, 2019 for the People’s Republic of China (excluding Hong Kong & Macau)
  • February 1, 2020 for all countries

The IRS normally allowed waivers for FEIE because of war, civil unrest, or similar adverse conditions. COVID-19 pandemic is now declared adverse condition qualifying for the waiver of time to meet the physical presence test.

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