Bona fide residence or 330 days: which test should you use?

A test of whether you genuinely live in a foreign country. The IRS asks for residence that runs unbroken through an entire tax year, which for calendar-year filers means 1 January to 31 December.

That the residence itself never stops, not that you never travel. The IRS allows brief or temporary trips back to the United States or elsewhere, provided you clearly intend to return to your foreign residence without unreasonable delay. A fortnight at your parents' house does not break anything.

What breaks it is giving up the residence.

Moving out, ending the tenancy and leaving with no settled plan to come back is a different matter.

So the question is about the life you keep, not the stamps in a passport.

It counts rather than judges. You qualify by spending 330 full days in a foreign country within any period of twelve consecutive months, and those days need not run together. Nothing about your intentions, your tenancy or your family arrangements matters.

That makes it objective and easy to evidence.

It also makes it unforgiving, because 329 days is a failure with no discretion attached.

So the counting test rewards records and punishes rounding.

Also note what the window is not. It is not the tax year, so the twelve months you pick can begin in any month and straddle two returns.

Twenty-four consecutive hours, running midnight to midnight. The IRS defines it that way, which means your travel days usually fail: a flight landing at eight in the morning leaves that calendar day short of a full twenty-four hours abroad.

Two travel days per trip therefore cost two days from the count.

Somebody crossing the Atlantic monthly loses roughly two dozen days a year to arithmetic alone.

So frequent travellers often fail the counting test while living abroad permanently.

No, and this trips up people who assumed that leaving America was enough. The IRS says time spent on or over international waters is not time in a foreign country, so a long sea crossing or a flight routed over the ocean produces days that belong to neither side.

Moving between two foreign countries costs you nothing at all.

However, travel outside any foreign country that takes 24 hours or more loses you the full days involved.

So the route matters as much as the destination.

Telling the host country you are not resident there. The IRS says you are not a bona fide resident if you make a statement to that country's authorities that you are not a resident of it. The rule bites even while the authorities are still deciding your status.

That matters in Britain, where residence statements turn up routinely.

In our practice people overlook this detail most often when they claim non-residence on one form and residence on another.

So keep the two filings consistent, because one of them can quietly destroy the other.

It depends on how temporary it genuinely is. A fixed one-year assignment with a flat paid for by an employer and a family left behind looks like a long trip rather than a change of residence, whatever the paperwork says.

A move with no end date, a tenancy and a school place looks like residence.

The IRS weighs the whole picture rather than any single document.

So an intention to return to America eventually does not by itself defeat the claim.

Almost always the counting one. Residence has to cover a whole tax year, so somebody arriving in September cannot satisfy it until the end of the following December. The 330-day test uses any twelve-month window, which can straddle two tax years.

That window is a choice, and it is worth making carefully.

The IRS prorates the exclusion by qualifying days in the tax year, so the window changes the figure.

So the first return abroad is the one where this decision is worth real money.

By qualifying days in the tax year. You take the maximum exclusion for the year, multiply by the days you qualified, and divide by the days in the year. A partial year therefore produces a partial exclusion rather than none at all.

The housing figures follow the same apportionment.

Our guide to the foreign housing exclusion sets out how those two numbers work.

So an autumn arrival still produces relief, just less of it.

Year by year, yes, and many people do. A first year abroad often relies on the day count, and later years rely on residence once a full tax year has passed with a settled home.

Nothing requires you to use the same test twice.

What matters is that you meet whichever one you claim.

So the sensible habit is to test both each year and claim the stronger.

In practice the switch happens quietly, in the second or third year, once a full calendar year abroad has passed and the arithmetic stops mattering.

There is, for war and similar conditions. The IRS can waive the minimum time requirement where you had to leave a country because of war, civil unrest or similar adverse conditions, and it publishes the list of waived countries each year.

You still need a tax home there and a qualifying status by the waiver date.

This is narrow relief and it does not cover an ordinary change of plan.

So it is worth knowing about and rarely worth relying on.

So read the published list before assuming a difficult year qualifies. The waiver covers named countries and dates rather than hardship in general.

It is the gateway to both tests. Neither route helps without a tax home in a foreign country, which generally means your main place of work sits abroad rather than in the United States.

Keeping an abode in America can defeat that, depending on the facts.

So a commuter arrangement needs its own analysis before you reach either test.

In short, the tax home question comes first and the choice of test comes second.

Our US federal returns service settles that question first, because an exclusion claimed without a foreign tax home fails however many days you counted.

A short sequence for a first or second year abroad.

A travel log, and it needs writing as you go rather than reconstructing afterwards. Boarding passes, a calendar with every trip marked, and bank activity showing where you spent money all serve. None of it takes long at the time, and all of it is painful to rebuild two years later.

The counting test fails or succeeds on this evidence.

Our guide to tax records for US and UK filers covers what else is worth keeping.

So a spreadsheet updated monthly is cheaper than a reconstruction two years later.

For most settled Americans here, yes, and it is the easier claim once established. A home, a job, a family and no end date is precisely what the test describes, and it survives the holidays and business trips that would wreck a day count.

The first full calendar year is the hurdle.

After that, the residence test generally carries the claim with far less arithmetic.

So the usual pattern is counting days in year one and relying on residence thereafter.

Consider an American who moves to Edinburgh in late September and spends ten days in the United States over Christmas.

She cannot use residence for that first year, because her residence does not cover a whole tax year until the end of the next one.

Choosing a twelve-month window that begins in October, she clears 330 days despite the Christmas trip, and claims a prorated exclusion for the qualifying days falling in the first tax year.

These facts are illustrative, and we recognize the pattern most years. The shape is ordinary: the counting test carries the arrival year, and residence takes over afterwards once a full calendar year has passed.

The first counts travel days as full days. They are not, and the error usually costs more days than people expect.

The second claims residence in the year of arrival, which the whole-tax-year requirement does not allow.

The third picks the twelve-month window carelessly, leaving qualifying days outside it.

The fourth tells the host country it is not resident there while claiming the opposite on the American return.

We test both routes against your actual travel before deciding which to claim, because in an arrival year the difference runs to thousands of dollars.

Where residence is available, we document the facts that support it rather than asserting it, which is what makes the claim hold if anyone asks.

Our foreign earned income exclusion service covers this, and fees stay fixed and agreed in writing. How we work sets out the process.

If you moved part-way through a year, talk to us before the return goes in.