also called FEIE · form 2555 · 2555
A US provision letting qualifying Americans abroad exclude a capped amount of earned income from US tax.
A US rule that lets qualifying Americans living abroad leave a capped slice of their earned income off their US tax bill. It only applies to money you work for, not investment income, and only if you pass a residence or day-count test. The foreign tax credit is the other main tool: instead of excluding income, it offsets US tax with tax you already paid abroad.
An American freelancing from overseas uses this to knock a chunk of salary off what the IRS can tax, but only after proving they spent enough days outside the US to qualify. Slip below that day threshold in a given year and the exclusion vanishes for that year.
It can wipe out US tax on a salary earned abroad, but only for earned income and only if you meet a residence or physical-presence test.
Foreign tax credit
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