Foreign Earned Income Exclusion Calculator (FEIE Form 2555)

The United States is one of the only countries in the world that taxes its citizens on worldwide income no matter where they live. Someone who moves to Lisbon, takes a local salary, and never sets foot in the US again still technically owes US federal income tax on that salary, on top of whatever Portugal collects. The Foreign Earned Income Exclusion exists to soften that double burden for ordinary wage earners and self-employed expats.

Under IRC §911, a qualifying individual can exclude a set amount of foreign earned income from US taxable income each year. For 2026, that amount is $132,900 per qualifying person, up from $130,000 in 2025 and $126,500 in 2024, since the limit is adjusted for inflation annually. A married couple where both spouses live and work abroad and both independently qualify can exclude up to $265,800 combined, since the exclusion is calculated per person, not per household.

Qualification is not automatic. A taxpayer must meet one of two tests. The Physical Presence Test requires being physically present in a foreign country or countries for at least 330 full days during any 12-month period, which is a pure day-counting exercise that does not depend on intent or residency status. The Bona Fide Residence Test instead asks whether the person is a genuine tax resident of a foreign country for an uninterrupted period that includes a full calendar tax year, which considers factors like a foreign visa, local tax filings, and the nature of the stay rather than a strict day count. This calculator assumes you already know which test you satisfy; it applies the resulting dollar exclusion rather than counting days for you.

Only "earned income," meaning wages, salary, or self-employment income for services actually performed while abroad, qualifies. Passive income like interest, dividends, rental income, or capital gains never qualifies for the FEIE, no matter where the taxpayer lives.

1. Cap the exclusion at the statutory limit. The excludable amount is the smaller of your actual foreign earned income or the 2026 FEIE limit of $132,900. Earning less than the limit excludes all of it; earning more caps the exclusion at $132,900 and leaves the rest exposed to US tax.
2. Isolate the taxable remainder. Any foreign earned income above the exclusion limit remains fully taxable, exactly as if it were domestic income.
3. Combine with other US-taxable income. Add the taxable foreign remainder to any other income that never qualified for exclusion in the first place, such as US-source wages, investment income, or foreign passive income.
4. Apply the standard deduction and federal brackets. The combined taxable gross income is reduced by the 2026 standard deduction for your filing status, then run through the same progressive federal bracket structure that applies to every other US taxpayer, using this platform's shared progressiveTax primitive.

Start with someone earning $90,000 abroad, fully qualifying, with no other US-taxable income, filing single.

• Excludable amount: min($90,000, $132,900) = $90,000
• Taxable foreign remainder: $0
• Total US-taxable gross income: $0
• US federal tax owed: $0

Now a higher earner: $180,000 in foreign earned income, plus $20,000 of US-source income, filing single.

• Excludable amount: min($180,000, $132,900) = $132,900
• Taxable foreign remainder: $180,000 − $132,900 = $47,100
• Total US-taxable gross income: $47,100 + $20,000 = $67,100
• Standard deduction (single, 2026): $16,100 → taxable income = $67,100 − $16,100 = $51,000
• Tax: 10% × $12,400 = $1,240; 12% × ($50,400 − $12,400) = $4,560; 22% × ($51,000 − $50,400) = $132
• Total federal tax owed: $1,240 + $4,560 + $132 = $5,932

And a married couple filing jointly, one qualifying spouse earning exactly $132,900 abroad, plus $50,000 of US-source income:

• Excludable amount: min($132,900, $132,900) = $132,900
• Taxable foreign remainder: $0
• Total US-taxable gross income: $0 + $50,000 = $50,000
• Standard deduction (MFJ, 2026): $32,200 → taxable income = $50,000 − $32,200 = $17,800
• Tax: 10% × $17,800 = $1,780 (the entire amount stays within the 10% bracket, which runs to $24,800 for MFJ)
• Total federal tax owed: $1,780

• The tax-rate stacking rule. In actual practice, the IRS Foreign Earned Income Tax Worksheet computes tax as though the excluded income still counted for determining which bracket your remaining income falls into, so the excluded amount can push your taxable remainder into a higher marginal bracket than a simple standalone calculation would suggest. This calculator applies the exclusion directly rather than reproducing that stacking worksheet, which slightly understates tax for filers with income both above and below the exclusion limit.
• The Foreign Housing Exclusion or Deduction. Many expats can also exclude or deduct a portion of housing costs above a base amount, generally capped around 30% of the FEIE limit ($39,870 for 2026). This calculator does not model housing costs separately.
• Self-employment tax. The FEIE excludes income from federal income tax but not from self-employment tax. A self-employed expat can still owe the full 15.3% self-employment tax on excluded earnings even though no income tax applies.
• State tax residency. Some US states, notably California, Virginia, and a few others, do not recognize the FEIE and can still tax worldwide income for residents who have not fully severed state residency. This calculator only models federal tax.
• Foreign Tax Credit alternative. Filers can choose the Foreign Tax Credit instead of the FEIE, and in high-tax countries the credit is often more valuable. This calculator does not compare the two; see the companion Foreign Tax Credit calculator for that side of the analysis.

• Assuming residency or a foreign address alone qualifies you. Neither test is satisfied by simply living outside the US. The Physical Presence Test requires an actual day count of 330 full days in a 12-month window, and short trips back to the US can break a qualifying period.
• Trying to exclude passive income. Interest, dividends, capital gains, pensions, and Social Security benefits are never eligible for the FEIE, no matter how long you have lived abroad.
• Electing the FEIE and then trying to also claim the Foreign Tax Credit on the same income. You generally cannot double up on both benefits for the same dollar of income; once excluded under the FEIE, that income cannot also generate a Foreign Tax Credit.
• Forgetting that excluding income also affects Additional Child Tax Credit and IRA eligibility. Because excluded income does not count as taxable compensation for some purposes, expats sometimes lose access to certain credits or retirement contribution room they would otherwise have.
• Missing the revocation rule. Once you elect the FEIE and later revoke it, you generally cannot re-elect it for five years without IRS approval, which is an easy detail to overlook when comparing years with and without the exclusion.

• Internal Revenue Service, "IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill," Revenue Procedure 2025-32. https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
• Internal Revenue Service, "Figuring the Foreign Earned Income Exclusion." https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion
• Internal Revenue Service, Instructions for Form 2555, Foreign Earned Income. https://www.irs.gov/forms-pubs/about-form-2555
• Internal Revenue Code §911 (Citizens or residents of the United States living abroad).