Expat Tax Calculator (FEIE vs Foreign Tax Credit)
Income abroad, tax paid there, and how long you have been away
Your result will appear here
Fill in the fields and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States — Fair Labor Standards Act wage and hour rules and federal payroll tax; many states require more than the federal floor, and state law wins where it does
- Rules and time period
- Wage, hour and withholding figures are the ones you enter. The federal minimum wage, the Social Security wage base and state overtime and tip rules each change on their own schedule.
- Scope and limitations
- Educational estimate only, not a payroll calculation or a determination of what you are owed. Overtime turns on the regular rate and on whether the job is exempt, garnishment limits depend on disposable earnings, and state law frequently sets a higher floor than the FLSA. Your employer's payroll system, not this page, produces the check.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your foreign earned income for the year — wages or net self-employment earnings for work physically performed abroad. Investment income, rent and pensions are not earned income and belong in the advanced Other income field instead.
- 02
Enter the income tax rate you actually pay where you live. This is the field the whole comparison turns on: it decides how much foreign tax there is to credit, and therefore whether the credit has anything to work with at all.
- 03
Enter the US federal rate this income would fall in WITHOUT the exclusion. Section 911(f) stacks the excluded income underneath, so the leftover is taxed at the rates that would have applied anyway — enter the low rate the remainder appears to sit in and the page will understate your bill.
- 04
Enter your qualifying foreign housing costs for the year — rent, utilities other than telephone, and insurance, but not mortgage principal, domestic help or anything lavish. Only the band above the base amount and below the ceiling produces an exclusion.
- 05
Enter full days abroad in your best 12-month window, then — in the field below it — the days of that window that fall inside this tax year. That second count is Form 2555 line 31, it is what the exclusion prorates by, and it is 365 if you were abroad all year. Add unbroken months of residence abroad, then leave the statutory block alone: the 2026 cap of $132,900, the $21,264 housing base, the $39,870 ceiling and the 330-day test. The advanced panel holds self-employment income, the 15.3% rate the exclusion never reduces, and the number of days in the tax year itself.
Formula
Qualifying fraction = 1 if you meet bona fide residence, otherwise the QUALIFYING days of your 12-month window that fall inside the tax year ÷ days in the tax year — Form 2555 line 31 — and only once your full days abroad have reached 330. Those are two different counts: the qualifying period is the window itself, US days included, so a window covering the whole calendar year earns the whole cap even though 35 days of it were spent in the States (26 CFR 1.911-3(d)(3)). Below 330 days abroad and without residence, the fraction is zero and no exclusion is available. Housing exclusion = min(your costs, ceiling × fraction) − base × fraction, floored at zero. On 2026 figures that is a $39,870 ceiling and a $21,264 base, so a maximum of $18,606. Income excluded = min(your foreign earned income, $132,900 × fraction + the housing exclusion). Under the exclusion (Form 2555): only the foreign tax on the income still standing is creditable, in the ratio the remainder bears to the whole. US tax = the remainder × your US rate, less that credit. Under the credit (Form 1116): US tax = all the foreign earned income × your US rate, less the foreign tax paid, capped by the section 904 limit at the US tax on foreign-source income. Anything above the cap is excess credit and carries back one year and forward ten. What the choice is worth = the income excluded × (your US rate − your local rate), floored at zero. That is why the gap closes to nothing once the local rate reaches your US rate.
Example
$160,000 earned in Dubai, a 15% local rate against a 24% US marginal rate, $45,000 of rent and utilities, and 345 full days abroad with no full tax year of residence yet. The day count clears 330 with 15 days of slack, and the 12-month qualifying window covers the whole tax year — 365 days on Form 2555 line 31 — so nothing prorates: the full $132,900 cap is available, and the housing band adds $18,606, for $151,506 shielded in total. That leaves $8,494 standing. Foreign tax paid is $24,000, but only the share attributable to the remainder — $1,274 — is creditable, because you cannot credit tax on income you excluded. US tax under Form 2555 is therefore $764. Under Form 1116 instead, the whole $160,000 is taxed at 24% for $38,400 and the full $24,000 of foreign tax credits against it, leaving $14,400. The exclusion wins by $13,636, which is exactly $151,506 × (24% − 15%). The 20 days at home cost nothing, because the proration runs on the window rather than on presence; cut line 31 to 184 days for a window that only starts on 1 July and the shielded total falls to $76,376 and the US bill rises to $7,526, which is the year-you-move case. Raise the local rate to 30% instead and both routes fall to zero US tax and the difference vanishes — but the credit route now generates $9,600 of excess credit carrying forward ten years, while the exclusion route generates nothing and locks in a five-year revocation rule. That is the whole decision in two runs of the same page.
Definitions
- Foreign earned income exclusion (FEIE)
- The section 911 election, made on Form 2555, that removes up to $132,900 of foreign earned income from US tax for 2026. Per qualifying person, indexed annually, and available only to someone who meets one of the two residency tests.
- Foreign tax credit (FTC)
- A dollar-for-dollar credit on Form 1116 for income tax paid to another country, limited under section 904 to the US tax on foreign-source income. Excess credit carries back one year and forward ten.
- Physical presence test
- 330 full days in a foreign country during any 12 consecutive months. A full day is midnight to midnight abroad; travel days and time over international waters do not count. Objective, countable, and prorated across the tax year.
- Bona fide residence test
- An uninterrupted period of residence abroad including an entire tax year, judged on facts and circumstances rather than counted. It prorates nothing, but claiming non-residence to the local tax authority defeats it.
- Housing base amount
- 16% of the exclusion cap — $21,264 for 2026 — which your foreign housing costs must exceed before any housing exclusion arises. The ceiling above it is 30% of the cap, or higher in the IRS high-cost localities.
- Stacking rule (section 911(f))
- Income above the exclusion is taxed at the rates that would have applied without it. The exclusion does not push the remainder into lower brackets, which is why this page asks for the rate the income would otherwise have fallen in.
Good to know
Filing from abroad, and the one choice the return forces
The United States taxes its citizens and permanent residents on worldwide income wherever they live. That is unusual — almost every other country taxes on residence — and it means a move abroad does not end the filing obligation, it complicates it. An American working in Berlin owes a German return and a US one on the same salary, and the US system offers two mechanisms to stop the same income being taxed twice. The foreign earned income exclusion, claimed on Form 2555, removes up to $132,900 of foreign earned income for 2026 from the US calculation altogether. The foreign tax credit, claimed on Form 1116, leaves the income in the calculation but credits the income tax you already paid to the other country dollar for dollar against the US bill. You may use both in the same year on different income, but never on the same dollar — foreign tax paid on income you excluded is not creditable, which is the rule that turns this into a genuine choice rather than a stacking exercise. Neither is automatic. Both are elections made on a filed return, so someone who stays silent gets neither and is taxed as though the foreign income were earned in Ohio. Expats do get an automatic extension to 15 June, with a further extension available on request, but interest still runs from April on anything owed, and the extension is only for filing. Two separate obligations sit alongside the return and are not affected by owing no tax: an FBAR if your foreign accounts exceeded $10,000 in aggregate at any point during the year, and Form 8938 at higher thresholds. Both carry their own penalties and both catch people who assumed that owing nothing meant filing nothing. That is the terrain. The rest of this page is about which of the two mechanisms costs you less, and it turns almost entirely on one number: the income tax rate where you live.
Qualifying: a count and a judgment
Neither mechanism is available to everyone abroad, and the exclusion in particular has a gate. You must have a tax home in a foreign country and meet one of two residency tests, and the two are not variations on a theme — one is arithmetic and the other is a judgment call. The physical presence test is the countable one: 330 full days physically present in a foreign country during any 12 consecutive months. Three details do most of the damage. A full day means midnight to midnight in a foreign country, so the day you fly out and the day you fly back generally do not count, and time over international waters never does — a repositioning cruise can burn days that were nowhere near the United States. The 12-month window may begin on any date at all, including one that straddles two tax years, and windows may overlap; picking the window that maximises your count is a legitimate and often decisive move that people miss because they instinctively measure the calendar year. And 330 out of 365 leaves 35 days of slack, which sounds generous until a funeral, a conference and a wedding have taken a week each. When the test is met on a window rather than a full year the exclusion prorates — but by the QUALIFYING days of that window falling inside the tax year, which is Form 2555 line 31, and not by the days you were physically abroad. Those are different counts, and the difference is the whole of the gap: 26 CFR 1.911-3(d)(3) says the qualifying period may include days on which you were not present in a foreign country, so a 345-day count on a window covering the whole calendar year still earns all $132,900 of the cap, and this page shows it. Proration bites in the year you move rather than in the year you take a holiday: a window that only starts on 1 July leaves 184 qualifying days and roughly half the cap. Bona fide residence is not a count at all. It requires an uninterrupted period of residence in a foreign country that includes an entire tax year, and it is judged on facts and circumstances: your intention, the nature and length of the stay, whether your family came, whether you took a lease or a mortgage, and critically your status under the local tax system. Because it covers a whole tax year by definition, nothing prorates and the full cap is available. But no calculator can decide it, and one act defeats it outright: telling the local authorities you are not resident there for their tax purposes while claiming to the IRS that you are. Treat the bona fide figure on this page as an upper bound, not an answer.
Why the exclusion usually shows the lower number, and when that stops mattering
Work through the arithmetic and the shape of the answer becomes clear. Under the exclusion, the US taxes only the income left standing after the exclusion, and credits only the share of foreign tax attributable to that remainder. Under the credit, the US taxes all of it and credits all the foreign tax, subject to the section 904 limitation capping the credit at the US tax on foreign-source income. Reduce both to a single marginal rate, as this page does, and what the choice is worth collapses to one expression: the income you excluded, multiplied by the gap between your US rate and your local rate, floored at zero. Everything follows from that. In a low-tax or no-tax country the gap is wide and the exclusion does all the work: at 15% local against 24% US on $160,000 with $151,506 excluded, the exclusion saves $13,636 over the credit, which is exactly $151,506 × 9%. As the local rate climbs the gap narrows, and once the local rate reaches or passes your US rate it closes entirely — both routes wipe out the US tax on the foreign income and the headline difference falls to zero. That is not the page being unhelpful; it is the correct answer, and it is where the real decision moves somewhere the headline cannot show it. Two things break the tie. The credit generates excess foreign tax when the local rate exceeds the US rate, and that excess is not lost: it carries back one year and forward ten, a tail the exclusion has no equivalent of. On the same $160,000 at a 30% local rate, the credit route banks $9,600 of carryforward while the exclusion route banks nothing. And the exclusion is sticky in a way the credit is not: once elected it stays elected until revoked, and once revoked you generally cannot elect it again for five tax years without the IRS's consent. So a first year in a zero-tax posting that makes the exclusion obviously right can lock you out of switching cleanly when the next posting is somewhere with real income tax. The general shape most advisers work to is that the exclusion suits low-tax countries and short-horizon assignments, the credit suits high-tax countries and long-horizon ones, and the year to think hardest is the first.
What neither route reaches
Four things sit outside both mechanisms and each one has surprised somebody expensively. The first is self-employment tax. The exclusion is an income tax provision, and Social Security and Medicare are not income tax — so a freelancer abroad who excludes every dollar of earnings still owes 15.3% on 92.35% of net profit, and a $0 income tax bill can arrive beside a five-figure self-employment tax bill. The only thing that removes it is a totalization agreement between the United States and the country you are working in, assigning you to one system rather than both; there are about thirty, and checking whether yours is on the list should be the first call rather than the last. The second is the stacking rule at section 911(f). The exclusion does not push your remaining income down into lower brackets: income above the exclusion is taxed at the rates that would have applied without it, so the first dollar after $151,506 is taxed as though it were the 152-thousandth dollar of income and not the first. That is why this page asks for the rate the income would have fallen in anyway, and why entering the low rate the leftover appears to sit in will understate the bill. The third is the housing exclusion, which is not automatic and not obvious. It works on a band: only costs above a base amount of $21,264 count, only up to a ceiling of $39,870, so the standard maximum is $18,606 and costs below the base produce nothing at all. The ceiling is the field to check, because the IRS publishes a list of high-cost localities every year where a substantially higher limit applies, and no calculator can look your city up. Qualifying costs are rent, utilities other than telephone, insurance and occupancy taxes; mortgage principal, domestic help and anything the regulations call lavish are out. The fourth is your state. Several states continue to assert residency after a move abroad, and they do not follow the federal exclusion — California and New York are the usual names — so a $0 federal bill can arrive with a state one standing behind it. This page prices federal tax only, converts no currency because this site holds no exchange rate, and applies a single marginal rate rather than the brackets. It is the shape of the decision, not the return.
Frequently asked questions
Should I take the exclusion or the foreign tax credit?
The local tax rate decides it. In a low-tax or no-tax country there is very little foreign tax to credit, so the credit does almost nothing and the exclusion does all the work — that is the Gulf, Singapore and much of Southeast Asia. Where the local rate approaches or exceeds your US rate the credit alone usually wipes out the US bill, and every dollar you exclude is a dollar of credit thrown away instead. The page runs both and prints the difference, so you are choosing between two numbers rather than between two forms. What it cannot weigh for you is the tail: the exclusion is sticky and the credit carries forward, which is the next question.
Why does the page say the choice is worth nothing when I pay more tax abroad than at home?
Because at that point both routes land on the same US tax, usually zero, and the page reports the difference honestly. What the choice is worth is the income excluded multiplied by the gap between your US rate and your local rate — so once the local rate matches or exceeds the US rate that gap closes and the two figures converge. The real decision then moves to two things the headline cannot show: the credit generates excess foreign tax that carries back one year and forward ten, which the exclusion has no equivalent of, while the exclusion locks you into a five-year revocation rule. Read the excess-credit figure and the election insight rather than the difference.
How much can I exclude in 2026?
$132,900 of foreign earned income per qualifying person, up from $130,000 for 2025, indexed annually under Revenue Procedure 2025-32. It is per person rather than per return, so a married couple who both qualify on their own work and their own days abroad can exclude twice that between them — but each must qualify separately, and the exclusion applies only to each person's own earnings. On top of that sits the foreign housing exclusion, worth up to $18,606 on the standard figures and substantially more in the cities on the IRS high-cost list.
What exactly is the 330-day test?
330 full days physically present in a foreign country during any 12 consecutive months — and the window may begin on any date you like, including one that straddles two tax years, so choose the window that maximises your count before concluding you have missed it. A full day means midnight to midnight in a foreign country, so the day you fly out and the day you fly in generally do not count, and time over international waters never does. That leaves 35 days of slack in a year, which sounds generous until a family emergency, a conference and a wedding have each taken a week. The exclusion then prorates by the qualifying days falling in the tax year.
What is bona fide residence, and is it better?
It is the other way to qualify, and it is not a count at all: an uninterrupted period of residence in a foreign country that includes an entire tax year, judged on facts and circumstances — your intention, the nature and length of your stay, your family and home arrangements, and your status under local tax law. Because it covers a whole tax year by definition, nothing prorates, so it can shelter the full cap where the day count would not. But it is a judgment rather than an arithmetic, and one thing defeats it outright: telling the local authorities you are not resident there for their tax purposes. Treat the figure this page shows for it as an upper bound.
Does the exclusion cut my self-employment tax?
No, not by a cent. The exclusion is an income tax provision and Social Security and Medicare sit entirely outside it, so a freelancer abroad who excludes every dollar of income still owes 15.3% on 92.35% of net profit. The only thing that removes it is a totalization agreement between the United States and the country you are working in, which assigns you to one country's social security system rather than both; there are about thirty of them and checking whether yours is on the list is the first thing to do. The rest of the arithmetic — the wage base cap, the deductible half — lives on the self-employment-tax page.