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I am going to be traveling to 12 different countries next year. I will be staying for a period of one month in each one. I will be employed by my current employer while traveling. I will not have a residence in the United States while traveling.

I would like to qualify for the FEIE to save a lot of money. What do I and my employer need to do to qualify me for the FEIE physical presence test? Do I put the 12 addresses on my w2? What financial obligations do I have to the countries I am staying in? Do need work visas for each country?

This trip is not work related. I am not being sent on a work related assignment. This is purely for fun. :)

  • You will almost certainly need work visas for each one, yes. That is a substantial, material issue that will consume a LOT OF TIME for your secretarial / legal team. – Fattie Nov 7 '18 at 13:33
  • Is your company big enough that they can officially transfer you to (one!) of their overseas divisions for a year? – Fattie Nov 7 '18 at 14:42
  • I am part of a small start up with one us based ha. So no. – Audus Nov 7 '18 at 15:49
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Disclaimer: I am not a lawyer, financial adviser nor based in the US. This is not legal/financial advice.

You may be out of luck. Starting from Foreign Earned Income Exclusion on the IRS site, and specifically Am I Eligible to Claim Either the Exclusion or the Deduction?, the key conditions that appear applicable to your situation1 are:

  1. You must not be employed by the US government;
  2. Your "tax home" must be in "a foreign country";
  3. You must be physically present in one or more foreign countries for 330 full days in a 12 month period.

You don't indicate whether (1) applies (my guess is you are not so employed), and it seems clear that (3) is OK. However, looking specifically at the description of what constitutes a "tax home" on Tax Home in Foreign Country, condition (2) would appear to be your biggest hurdle. An example of what would qualify for FEIE is:

For several years, you were a marketing executive with a producer of machine tools in Toledo, Ohio. In November of last year your employer transferred you to London, England, for a minimum of 18 months to set up a sales operation for Europe. Before you left, you distributed business cards showing your business and home addresses in London. You kept ownership of your home in Toledo but rented it to another family. You placed your car in storage. In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London.

i.e. a full-scale relocation for an extended period.

Furthermore, on the difference between temporary or indefinite assignment, it says (my emphasis):

The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. [...]

If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite.

Taken together, to my untrained mind I suspect you may have trouble arguing that your tax home has changed, and/or has changed permanently enough to be able to qualify for FEIE. Even if you can come up with some "facts and circumstances [that] indicate otherwise", your total time away is only going to be 12 months in total, so would appear to be classed as temporary and therefore non-qualifying.

As discussed in comments, the final clincher as to why I believe you won't qualify for FEIE is that it seems very unlikely that you will establish a "tax home" in any of the 12 countries you will be visiting, if you're only going to be in any one country for a month (but that doesn't mean you won't have a tax liability in those countries). If you never establish a "tax home" elsewhere during your 12 months' of travelling, logic dictates that it remains where it currently is – namely the US – thus excluding you from being able to claim FEIE.


1 There are some alternative ways of qualifying, but those don't appear to apply to your situation.

  • I have to disagree TH, your own facts: (A) he will be physically present in foreign countries 330+. (B) section two, it is in fact a full year assignment. (It's commonplace that people do precisely this when it is "exactly a year to the day"; I personally just think the language on that last quoted para is a bit flakey.) – Fattie Nov 7 '18 at 13:42
  • @Fattie I've no problem with Op meeting the 330+ days requirement, but the "tax home" requirement is separate. The paragraph on the IRS page specifically includes "in a single location" for the 12-month/1-year cut-off: if all the work in were to be in a single location, then OP may well be fine. But 12 different, one-month placings does not to me seem to be enough to move their "tax home" away from the US as things are worded [cont]. – TripeHound Nov 7 '18 at 14:29
  • Of course (and this is why the OP needs to speak to an expert in the field), it may be that 12x1-month stints can be argued to be a special case (and sufficient to move "tax home"), despite the IRS's wording specifying "a single location". – TripeHound Nov 7 '18 at 14:30
  • hi TH, I read that as: "if in a single location for <1 year" you are disqualified. The immediately following sentence clearly says "If you expect it to last for more than 1 year, it is indefinite." I would just say, I know of .. 4 .. more? cases of US folks being outside of the US for a year, and making/getting the "FEIE" thingy (I didn't know it was called that!) and they were certainly in "more than one place". – Fattie Nov 7 '18 at 14:35
  • As everyone knows, US tax "law" is fucked. I asked this subtle question money.stackexchange.com/q/100474/41786 of my tax company. They came back asserting absolutely "yes". I said thanks and got into an email discussion with them, escalating through their experts! I pointed out the info "nanoman" provided there. There was huge investigations. Eventually they said "right, we were totally wrong, the answer is "no"". The whole thing's a fiasco. (The para you quote just above is so far from being clear legal guidance language - its' a joke.) We should all just move to Monaco. :O – Fattie Nov 7 '18 at 14:37
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Purely in my opinion you pass.

  1. You will be physically present in 1+ foreign nations for 330+

  2. "I will not have a residence in the United States while traveling." I assume you mean you either (1) sold your owned house (2) rented out your owned house (3) stopped renting. You have no tax residence in the US

  3. Your assignment is for 12+ months. (OK, it's "12" but that is OK; it's totally normal that large corporate send people on "exactly 12 months" assignments. Have your employer adjust it by a couple weeks up if you wish.)

Grounding: I have never had to do this from the US experience, but I have been intimately involved in numerous of these for US folks.

I know a number of actual examples of US folks who did this, for 2 months, and did NOT stay only in one country (2 or 3 countries). So.

Obviously, this is just "people guessing on the net", ask a tax person! (Be aware that they may be totally wrong unless they do zillions of these.)


Hot tip. You surely use "taxact.com" or one of the others to file your taxes. They are remarkably helpful, and prompt, if you email them your query. They're often "wrong" but at least it's something.


PS as I mention in a comment "12 visas ... You will almost certainly need work visas for each one, yes. That is a HUGE material issue."

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