In order to qualify under the Physical Presence Test (PPT) one must be present outside the United States for 330 days out of any 365 days (330 out of 366 days in leap year). Travel to South and Central America depend on your flight path or course. Thanks for the clarification. EXCEPTIONS to the Substantial Presence Test: F or J students receive 5 “exempt”** years. Also, if you are present in a foreign country in violation of U.S. law, you will not be treated as physically present in a foreign country while you were in violation of the law.
If you remain in Portugal, your next full day in a foreign country is July 9.You do not meet the physical presence test if you are not present in a foreign country or countries for at 330 full days in a 12-month period regardless of the reason for the failure, including illness, family problems, a vacation, or your employer's orders. I guarantee the IRS will do anything to separate you from your money, so you must be even more diligent to protect your rights.As you know, the FEIE allows an American abroad to exclude up to $97,600 of wage or salary income for 2013 from your U.S. personal income tax return.
Under this test, you must spend at least 330 full days in a 12 month period in foreign countries.
To determine if you meet the substantial presence test for 2014, count the full 120 days of presence in 2014, 40 days in 2013 (1/3 of 120), and 20 days in 2012 (1/6 of 120). For example, if you do not meet the physical presence test because of illness, family problems, a vacation, or your employer’s orders cause you to be present for less than the required amount of time, the FEIE physical presence test is lost.These new interpretations can hit perpetual travelers and cruise ship passengers hard.Because this was at the end of their 330 day cycle, and they had previously spent some days in the U.S. during the year, they lost the FEIE in its entirety. You were physically present in the U.S. on 120 days in each of the years 2012, 2013, and 2014. Therefore, to meet the FEIE physical presence test travel days you must now spend each of the 330 full days in a foreign country or countries.If you are using the FEIE physical presence test travel days to qualify for the exclusion, watch your calendar closely. Therefore, to meet the FEIE physical presence test travel days you must now spend each of the 330 full days in a foreign country or countries. When you leave the United States, or return to the United States, the time you spend on or over international waters does not count toward the 330-day total. This meant the trip took more than 24 hours and that they were considered present in the U.S. during their stop-over. When you leave the United States to go to a foreign country or when you return to the United States from a foreign country, the time you spend on or over international waters does not count as time in a foreign country.You leave the United States for France by air on June 10. This guy and his wife were just getting by on $55,000 per year as the captain and crew of a millionaire’s yacht, and the FEIE was everything to them.As a result, they missed their flight from Miami to Cayman and had to spend the night in Florida. Substantial Presence Test. Do not count the following as days of presence in the U.S. for the substantial presence test.The term United States (U.S.) includes the following areas. Not exempt from tax, but of counting physical days of presence in the U.S. towards Substantial Presence Test. This applies to F1, OPT, H1B, L1, L2 visa holders. There are four rules you should know when figuring the 12-month period:However, the minimum time requirement can be waived if you must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. To determine if you meet the substantial presence test for 2014, count the full 120 days of presence in 2014, 40 days in 2013 (1/3 of 120), and 20 days in 2012 (1/6 of 120). Altro LLP regularly advises snowbirds about the above issues. If you exclude days of presence in the U.S. for purposes of the substantial presence test because you were an exempt individual or were unable to leave the U.S. because of a medical condition or medical problem, you must include Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition, with your income tax return. You are treated as physically present in America for the entire period you were physically located inside designated places, irrespective of … The Substantial Presence Test is a criterion used by the Internal Revenue Service in the United States to determine whether an individual who is not a citizen or lawful permanent resident in the recent past qualifies as a "resident for tax purposes" or a "nonresident for tax purposes"; it is a form of physical presence test. Thus, they lost two full FEIE physical presence test days.I note that you can’t pro-rate the FEIE physical presence test. Therefore, to meet the FEIE physical presence test travel days you must now spend each of the 330 full days in a foreign country or countries.
You will be considered a U.S. Resident for tax purposes if you meet the substantial presence test. Substantial presence test example.
Qualifying under PPT is our biggest source of client questions. However, the Bona Fide Residency Test is a popular way to qualify for the FEIE as it has added advantages.