Why 330 Days Abroad Can Still Fail FEIE

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Fail the IRS tax home test and the $130,000 Foreign Earned Income Exclusion for 2025 never leaves the Form 1040, even if you slept 330 nights in Medellín. At the 24% bracket that is $31,200 of federal income tax on wages you already treated as “excluded.” The 2026 cap is $132,900. The day count is not the whole test.

This is a supporting playbook for people who already know the exclusion exists. The mechanics of claiming it live on the FEIE guide. Here the job is the third requirement: a tax home in a foreign country, with an abode that is not in the United States. Beginners get the decision tree. Operators get the one-year assignment line. Families get the spouse-stays-home trap. It sits in the Expat Tax & Finance cluster, not in a second “how FEIE works” rewrite.

Why can 330 days abroad still fail Form 2555?

Because 26 U.S.C. § 911 is three gates, not one. You need foreign earned income, a qualifying presence or residence period, and a tax home in a foreign country for that entire period. Miss the third gate and the first two do not matter.

The IRS is explicit on the foreign earned income exclusion page: you do not have a foreign tax home if your abode remains in the United States, where you keep closer family, economic, and personal ties, unless you are serving in support of the Armed Forces in a designated combat zone. A perfect 330-day calendar does not override that.

The three gates, in the order the IRS actually uses

1. Foreign earned income: wages, salaries, professional fees, or reasonable compensation for personal services performed in a foreign country. Not Social Security, not pensions, not U.S. government pay, not a distribution dressed up as salary from a foreign corporation.
2. Bona fide residence for an uninterrupted period that includes a full tax year, or physical presence of 330 full days in foreign countries during any 12 consecutive months. Day counting is its own workflow on how to count 330 days for FEIE.
3. Tax home in a foreign country throughout that same qualifying period, and an abode that is not in the United States.

Gate three is where rotational oil workers, “nine-month contract in Lisbon” employees, and digital nomads who never closed the U.S. household fail. The physical presence test measures nights. The tax home test measures where you are engaged to work, and whether that engagement is temporary or indefinite.

What is a tax home for the FEIE?

Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where your family lives. The IRS tax home in a foreign country page uses that vocational definition, and it matches 26 CFR § 1.911-7 on how the election is made. A tax home is not your domicile, not your driver’s license state, and not whichever country stamped your visa.

If you have no regular or main place of business because of the nature of the work, the tax home can be where you regularly live. If you have neither a regular workplace nor a regular place you live, you are an itinerant and the tax home is wherever you work that day. Itinerant status is not a loophole. It means the home travels with the job, so a month of U.S. client work can yank the tax home back to the United States for that stretch.

Data note: FEIE dollar caps below are from IRS figures checked in September 2026. Use the cap for the tax year of the services, not the year you feel like filing.

Temporary vs indefinite: the one-year line

The location of the tax home often turns on whether the foreign assignment is temporary or indefinite. If you are temporarily away from a U.S. tax home on business, you do not qualify for the exclusion. If the foreign work is for an indefinite period and your abode is not in the United States, the tax home is in the foreign country.

The IRS uses the same one-year expectation that governs travel deductions. If you expect employment away from home in a single location to last, and it does last, for one year or less, it is temporary unless facts and circumstances say otherwise. If you expect it to last more than one year, it is indefinite even if you come home early. If you start expecting one year or less and later expect more than one year, it is temporary only until the expectation changes. That is the rule on the tax-home page, and it tracks Publication 463 and Revenue Ruling 93-86 under section 162.

Situation	Tax home	FEIE on foreign wages?	What to document
Nine-month secondment to Berlin, return date on the offer letter	Stays in the United States	No. Assignment is expected to last one year or less	Offer letter, expected end date, return ticket, U.S. desk that still exists
Open-ended transfer to London, U.S. house rented to tenants, family moved	London, if abode is not the United States	Yes, if you also meet residence or 330-day presence	Lease, local IDs, school enrollment, bank activity in the foreign country
Contract said 10 months; in month 6 the firm extends you through month 18	U.S. until the expectation changes, then foreign if abode moved	Only for the period after it became indefinite, and only with a foreign abode	The email or amendment that changed the expected end date
Self-employed, no office, four countries in 12 months, no regular home	Itinerant: wherever you work that day	Only for days actually working in a foreign country, not U.S. or international waters	Calendar, invoices showing where the services were performed

A series of short assignments to the same city can add up to an indefinite post even if each contract is six months. Stack three Lisbon contracts in a row and you are not “temporarily away from Austin.” You are living in Lisbon.

What does the IRS mean by abode?

Abode is domestic, not vocational. It is home, habitation, family, economic, and personal ties. It is not your principal place of business. You are not treated as having a tax home in a foreign country for any period your abode is in the United States, with a narrow combat-zone exception for tax years beginning after December 31, 2017.

A U.S. house does not automatically create a U.S. abode. The IRS says your abode is not necessarily in the United States merely because you maintain a dwelling there, whether or not a spouse or dependents use it. Temporary presence in the United States also does not, by itself, plant the abode back home. Those facts can still contribute. The test is the center of gravity, not a single checkbox.

The 28/28 oil-rig example, copied from the IRS

Example 1 on the IRS tax-home page is the one operators ignore. You work an offshore rig in the territorial waters of a foreign country on a 28-day-on / 28-day-off schedule. You return to the family residence in the United States on the off rotation. You have a U.S. abode. You fail the tax home test. You cannot claim the earned-income exclusion, the housing exclusion, or the housing deduction.

Example 2 is the opposite: indefinite transfer, U.S. house rented out, car stored, spouse, children, furniture, and pets moved to a London rental. Local licenses, library cards, foreign bank accounts, civic groups. Abode is in the foreign country for the time you live there. Tax home test: passed.

Families should treat the oil-rig pattern as a warning, not just an energy-sector story. A remote employee who spends 40-hour weeks in Bogotá and every weekend and school holiday in the furnished U.S. house where the kids still attend school is arguing Example 1 with better Wi-Fi. If that is you, model a foreign tax credit on Form 1116 instead of forcing Form 2555, or wait until the household actually moved.

Which places do not count as a foreign country?

A foreign country is territory under the sovereignty of a government other than the United States, including airspace and territorial waters out to 12 nautical miles, plus certain seabed areas with exclusive resource rights. That definition is on the same IRS tax-home page and in the 2025 Instructions for Form 2555.

It does not include Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa. It does not include the Antarctic region. It does not include international waters or airspace, or offshore installations outside any country’s territorial waters. Days on a cruise between ports, a flight over the Atlantic, or a platform outside the 12-mile line do not count as foreign-country presence and do not support a foreign tax home for those hours.

Puerto Rico has its own bona fide resident rules under other Code sections. Those rules are not a substitute for section 911. If you are comparing a Spain inbound regime after an indefinite move, the local tax is a separate model from this test; see the Spain Beckham Law 24% flat-tax guide for the Spanish side, then come back here to confirm the U.S. tax home actually left the United States.

Part-year tax home shrinks the dollar cap

Qualifying days are the days in the year during which you have a foreign tax home and you are a bona fide resident or meet the physical presence test. The IRS figuring page walks the fraction: maximum exclusion times qualifying days divided by 365 (366 in a leap year).

Their own example: you establish a tax home and bona fide residence on August 14, 2025, and keep it through January 31, 2027. Qualifying days in 2025 are 140 (August 14 through December 31). Maximum 2025 exclusion is $49,863 (140/365 × $130,000). Housing expense limits follow the same logic. The general housing cap is 30% of the FEIE maximum: $39,000 for 2025 and $39,870 for 2026, then adjusted for location and qualifying days.

How do remote workers and families actually pass?

Pass means facts on the ground, not a lease PDF in a Dropbox folder. The IRS examples reward an indefinite work attachment plus a household that actually relocated. They punish a U.S. family base with a foreign job site you visit in blocks.

1. Write down the expected length of the foreign work on day one. If the honest answer is “through next June, then back to Denver,” you are still a U.S. tax-home person for FEIE. Pay or credit foreign tax. Do not elect section 911 for the fun of it.
2. If the work is open-ended, move the center of life. Rent or sell the U.S. house, or put it in a true third-party rental. Move the people who live with you, or document why a spouse remaining behind does not keep your abode in the United States. School, doctors, gym, church, and the grocery card are evidence. So is where you spend non-work weeks.
3. Open and use local financial accounts for daily cash. A Charles Schwab brokerage can stay in dollars for investing and ATM access without automatically planting your abode in the United States, but if every bill, payroll, and rainy-day balance still lives only in U.S. accounts, that is an economic-tie fact the IRS listed in Example 2 as something the successful family changed.
4. Operators invoicing U.S. clients from a foreign city should keep the operating account at Mercury Bank in the U.S. entity and still show a foreign post of duty: a lease, coworking that is actually used, local tax ID if the host country requires one. A U.S. LLC does not freeze the tax home in Delaware. The services are performed where you sit.
5. Track where the services were performed, not where the customer sits. A Zoom call from Miami in January is U.S.-source personal services for that day even if the client is in Munich. Itinerants need a calendar, not a vibe.
6. Do not count Puerto Rico, Guam, a cruise, or Antarctica toward the foreign-country clock. Do not count U.S. government wages. Do not count a pension. Do not count pay received after the end of the year following the year you did the work.
7. If you only partly qualify, run the day fraction before you tell anyone you “maxed FEIE.” August 14 starters are in the $49,863 world for 2025, not $130,000.
8. If FEIE is the wrong tool, use Form 1116. High-tax countries often beat a forced exclusion once you model the stacking and the lost credits. Revoking a later-year election is a five-year event. Do not elect just to see what happens.

Retirees collecting Social Security abroad can skip most of this article. Pensions and Social Security are not foreign earned income. The tax-home test is irrelevant to benefits you did not earn by working this year. If you pick up consulting in Greece or Spain, the earned slice is back on this page.

The $130,000 exclusion is a facts test

The cash-flow lever is legal tax drag, not a travel stamp. An indefinite foreign post plus a household that actually moved can keep $130,000 (2025) or $132,900 (2026) off federal income tax on earned pay. A nine-month secondment, a 28/28 rotation to a U.S. family house, or 330 days with the center of life still in Ohio cannot. U.S. citizens still file Form 1040 on worldwide income either way.

Document the expected end date, the place you regularly work, and where family and daily banking actually sit. Then choose Form 2555 or Form 1116 on purpose.

Data notes / Sources checked

Caps, housing percentages, and examples were checked against IRS pages in September 2026 and can change with inflation adjustments and form revisions.

• IRS — Tax home in a foreign country — vocational tax home, abode, 28/28 example, one-year temporary rule, 12-nautical-mile waters, U.S. territories excluded
• IRS — Figuring the foreign earned income exclusion — $130,000 (2025), $132,900 (2026), $49,863 part-year example, housing $39,000 / $39,870, self-employed allocation to $80,544
• IRS — Foreign earned income exclusion — what is not foreign earned income; self-employment tax not reduced; combat-zone abode exception
• IRS — 2025 Instructions for Form 2555 — tax home test, foreign-country definition, automatic two-month extension to June 15, 2026
• IRS Publication 54 — Tax Guide for U.S. Citizens and Resident Aliens Abroad
• IRS Publication 463 — temporary vs indefinite assignment, one-year expectation
• 26 CFR § 1.911-7 — election and procedural rules for section 911
• Rev. Proc. 2025-32 — $132,900 FEIE amount for taxable years beginning in 2026