Form 2555
Form 2555 is used to claim the foreign earned income exclusion plus the foreign housing exclusion or deduction, if applicable. The computed exclusion amount is carried from Form 2555 to the other income line of the tax return (2023 Form 1040 or 1040SR, line 8d, Schedule 1) and entered as a negative amount. The foreign housing deduction is entered on Form 1040 or 1040SR, Schedule 1, line 24j.
Limited Time to Choose the Exclusion
A taxpayer needs to claim the Sec 911 exclusion on Form 2555 by filing:
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A timely filed income tax return (including extensions)
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An amended return (generally within 3 years of the filing date of the original return or 2 years after the tax is paid), or
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A late-filed return that’s filed within one year after the due date for the first year for which the election is to be effective.
To choose the exclusion on a return filed after the periods described above, the taxpayer must not owe federal income tax after taking into account the exclusion. If there’s tax owed after the exclusion is taken into account, the taxpayer can choose the exclusion on a return filed after the periods described above only if it is filed before the IRS discovers that the taxpayer failed to choose the exclusion. Whether or not federal income tax is owed after taking the exclusion into account, if the return is filed after (1), (2), or (3) above, the following must be typed or legibly printed at the top of the first page of the Form 1040 or 1040-SR, “Filed pursuant to section 1.911-7(a)(2)(i)(D).”