Short-Term Work Assignments Abroad: Do You Qualify for the FEIE?

Whether you qualify for the Foreign Earned Income Exclusion on a short-term international work assignment depends on whether you meet the Physical Presence Test (330 full days abroad in any 12-month period) or the Bona Fide Residence Test (a full tax year of residence in a foreign country). A short-term assignment of three to six months typically won't satisfy either test on its own, but if it's part of a longer stretch of time spent abroad, the 12-month period for the Physical Presence Test can be set to maximize qualifying days. Your tax home must also shift to the foreign country — if you're still considered domiciled in the US with a temporary foreign assignment, the IRS may deny FEIE eligibility even if you meet the day count. Short-term assignees who don't qualify for the FEIE but pay foreign income taxes on their wages can still claim the Foreign Tax Credit to avoid double taxation. Planning the timing of your return to the US relative to the 12-month FEIE window can sometimes result in partial-year exclusions that significantly reduce your US tax.