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How does the Foreign Earned Income Exclusion work when I’m a US dual national in Qatar?

The FEIE allows US citizenship holders to exclude a certain amount of their foreign-earned income from US taxes, provided they meet specific criteria. For the tax year 2024, this exclusion amount is set at US$126,500. This means if you’re someone who has US citizenship and living in Qatar, and you meet the eligibility requirements, you can earn up to US$126,500 without owing any US income tax on those earnings.

How do I qualify for the FEIE?

Qualification for the FEIE hinges on either the Physical Presence Test or the Bona Fide Residence Test. For the Physical Presence Test, you must prove that you have spent at least 330 full days outside of the US within a consecutive 12-month period. This period does not need to align with the calendar year, allowing some flexibility in meeting the requirement.

Can I earn US$126,500 tax-free in Qatar under the FEIE?

Yes, if you qualify for the FEIE by meeting the necessary residency or presence tests, you can exclude up to US$126,500 of your income earned in Qatar from US taxation.

What counts towards the 330-day physical presence requirement?

The 330-day requirement for the Physical Presence Test involves being physically present in a foreign country, or countries for at least 330 full days during 12 consecutive months, not necessarily within a single calendar year.

However, it’s important to note that only the days you are physically present in a foreign country count towards this total. Any days you spend in the US, up to 35 days within the 12-month period, will not disqualify you from claiming the exclusion.

How does the FEIE affect income earned across two tax years?

When applying the Physical Presence Test, you may span two tax years to meet the 330-day requirement. However, the exclusion only applies to income earned within the specific tax year for which you are filing. This means you can bridge two years for eligibility but can only exclude income from the calendar year you’re reporting.

Can I also claim the Foreign Housing Exclusion if I’m living in Doha?

Yes, learn more about the Doha Foreign Housing Exclusion here.

 

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