Form 2555

Foreign Earned Income

Tax form 2555 is used to figure the foreign earned income exclusion and housing exclusion or deduction. Taxpayers may be able to claim an exclusion for income earned while they lived and worked in a foreign country if they qualify under the bona fide residence test or the physical presence test and if they have a foreign tax home. IRS form 2555 also encompasses deductions related to the excluded income to ensure that a taxpayer is not both claiming a deduction related to the excluded income and also excluding the same income.