Tax Home
Tax home is the general area of a taxpayer’s main place of work (as employee or self-employed), regardless of where the taxpayer maintains his/her family home. A taxpayer is not considered to have a tax home in a foreign country for any period in which his/her abode is in the U. S. "Abode" has been defined as one's home, habitation, residence, domicile, or place of dwelling. "Abode" has a domestic rather than a vocational meaning and does not mean the same thing as "tax home." The location of abode often depends on where a taxpayer has economic, family, and personal ties.
Example - Abode vs. Tax Home: Ima Way is employed on an offshore oil rig in the territorial waters of a foreign country and works a 28-day on/28-day off schedule. She returns to her family home in the United States during off periods. Ima is considered to have an abode in the United States and does not satisfy the tax home test in the foreign country. She cannot claim either of the exclusions or the housing deduction.
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Exception - The Bipartisan Budget Act of 2018 changed the tax home requirement for contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones. These individuals may now qualify for the foreign earned income exclusion even if their “abode” is in the United States. Applies for tax year 2018 and subsequent years.