Foreign Earned Income Exclusion FEIE 2027 Calculator

The Foreign Earned Income Exclusion under IRC §911 lets US citizens and resident aliens working abroad exclude qualifying foreign-earned income from US taxation. The 2027 limit is approximately $130,000 per qualifying individual (estimated — IRS adjusts annually for inflation; 2025 was $126,500). Plus the Foreign Housing Cost Amount exclusion for housing above a base of approximately 16% of FEIE.

How FEIE Qualification Works in 2027

Two paths to qualify, both requiring foreign tax home: (1) PHYSICAL PRESENCE TEST — at least 330 full days outside the US during any 12-consecutive-month period. Each day must be a complete 24 hours outside US. (2) BONA FIDE RESIDENCE TEST — established as a bona fide resident of a foreign country for an uninterrupted period that includes a full tax year. Subjective test: residency intent, family location, host-country tax filings.

The Foreign Housing Cost Exclusion

Beyond the income exclusion, FEIE allows additional exclusion of foreign housing costs above 16% of FEIE ($20,800 base in 2027 est). Maximum housing exclusion is capped at 30% of FEIE ($39,000 default), but high-cost cities have higher caps: Tokyo $93,000, London $79,000, Singapore $66,000, Hong Kong $114,300, Geneva $77,200 (per IRS Rev. Proc. 2024-40 with annual adjustments). Use Form 2555.

FEIE vs Foreign Tax Credit — When Each Wins

FEIE excludes income from US tax computation. FTC offsets US tax with foreign tax paid. FEIE wins in low-tax countries (UAE, Saudi Arabia, Singapore) where you wouldn't have foreign tax to credit. FTC wins in high-tax countries (Germany, France, UK) where foreign tax exceeds US tax — credit fully offsets US tax with carryforward of excess. Most US expats use a combination depending on income type and country.

Last updated May 2026. Sources: IRS — FEIE, IRS Form 2555