FEIE (Foreign Earned Income Exclusion, Form 2555)

Form 2555 elects to exclude foreign-earned income from US gross income, up to an annually-indexed cap ($126,500 for 2024, $130,000 for 2025). To qualify you must meet either the bona fide residence test (resident of a foreign country for an uninterrupted period including a full tax year) or the physical presence test (330 full days in a foreign country in any 12-month period). The exclusion does not apply to passive income, and stacking rules under §911 still tax non-excluded amounts at the rate that would have applied without the exclusion.