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FEIE vs Foreign Tax Credit estimator
By Danilson Ramos · Founder, Atamatax
Updated
2027 Tax Planning — Rules Published November 2026
2027 is the income year, generally filed in 2028. A 2026 return filed in 2027 uses 2026 rules. Higher thresholds do not guarantee tax savings.
| Parameter | 2025 | 2026 | 2027 |
|---|---|---|---|
| FEIE maximum per qualifying person | $130,000 | $132,900 | $137,300 |
| Standard deduction · Single / MFS | $15,750 | $16,100 | $16,600 |
| Standard deduction · MFJ | $31,500 | $32,200 | $33,200 |
| Standard deduction · Head of household | $23,625 | $24,150 | $24,925 |
| Maximum Child Tax Credit | $2,200 | $2,200 | $2,300 |
| Maximum refundable ACTC | $1,700 | $1,700 | $1,800 |
| Expatriation five-year average tax test | $206,000 | $211,000 | $218,000 |
| Expatriation mark-to-market exclusion | $890,000 | $910,000 | $940,000 |
Verified November 6, 2026 against Rev. Proc. 2026-35, §§3.05, 3.15, 3.39–3.41. Final 2027 filing instructions and city housing limits remain pending verification. Form 2555 claims bar refundable ACTC; nonrefundable CTC has separate requirements.
Compare my FEIE and FTC optionsBefore you rely on this result
What would settle it, and what covers it
Documents or facts needed
- • Foreign income by type (wages, self-employment, pension, investment)
- • Foreign tax paid on each
- • Prior FEIE elections or revocations
Where this leads
Simple · $299 — models both routes inside the return.
Also possible: Complex ($799). The cheapest route that covers your facts is the right one; a package never covers more than one tax year.
How to read a status
- Likely:
- The facts entered meet the published test; confirm the inputs before acting.
- Possible:
- Some facts point this way and others are missing; more information decides it.
- Needs review:
- These inputs leave it open; a person should look before filing.
- Not currently indicated:
- Nothing entered triggers it this year; a changed fact can change the answer.
- Outside supported scope:
- This item is routed to a professional for preparation.
Scope. A comparison on the figures entered; a revoked exclusion cannot be re-elected for five years, which the comparison cannot see. This is a computation on the answers you gave, not individualized tax advice.
Tool: /tools/feie-vs-ftc
What changes the result
This answer changes if…
Whether the exclusion or the credit is the better route
- …your foreign income tax rate is above the U.S. rate on the same income — the foreign tax credit tends to leave no U.S. tax and carries excess credit forward; the exclusion cannot.
- …you were in the United States for more than 35 days in the twelve-month period — the physical-presence test for the exclusion is lost for that period.
- …the income is a pension, a distribution or investment income rather than earned income — the exclusion covers earned income only; the credit covers foreign tax on any category.
- …you claimed the exclusion in a prior year and now revoke it — a revocation locks the exclusion out for five years without IRS consent.
- …you have self-employment income — the exclusion does not reduce U.S. self-employment tax; a totalization certificate does.
Whether the 3.8% net investment income tax applies
- …your modified adjusted gross income is below the threshold for your filing status — the tax applies only to the lesser of net investment income and the excess over the threshold. Check it
- …you claim the foreign earned income exclusion — excluded wages are added back for the threshold test.
- …you rely on a treaty to credit foreign tax against this tax — the credit against the net investment income tax rests on a treaty article and on litigated positions, not on Form 1116.
- …a PFIC is under a QEF election — QEF inclusions enter net investment income only under a separate election (the 'section 1.1411-10(g)' election).
Each line names a fact that moves the result; what it moves to depends on the rest of your facts. Nothing here is a determination.
How Atamatax calculations are produced — the tests applied, statutory sources and review cadence — is documented in the methodology, and how the engine is validated in accuracy & review. Calculation fixes are recorded in the changelog.
Authorities cited
- IRC §911 — IRC §911 — Foreign earned income exclusion + housing exclusion/deduction
- IRC §901 — IRC §901 — Taxes of foreign countries and U.S. possessions
- IRC §904 — IRC §904 — Limitation on the foreign tax credit
- IRS Form 2555 — About Form 2555 — Foreign Earned Income (FEIE + housing)
- IRS Form 1116 — About Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)
Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.
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