FEIE 2026: Foreign Earned Income Exclusion Amount

For tax year 2026 the foreign earned income exclusion ceiling is $132,900 of foreign earned income for qualifying individuals—an inflation-adjusted figure from the IRS. Earned income means wages or self-employment for personal services performed abroad; investment income does not qualify.

You must also pass either the physical presence test (generally 330 full days abroad in a 12-month period) or the bona fide residence test. Failing either test by a few days can wipe out the entire exclusion for that window.

Exclusion vs credit

FEIE reduces U.S. taxable earned income. The foreign tax credit reduces U.S. tax on foreign-source income using Form 1116. You generally cannot stack FEIE and FTC on the same dollar of income. High-tax countries sometimes make the credit more valuable; low-tax or no-tax host countries often favor FEIE.

Housing exclusion or deduction rules sit beside FEIE with their own base amounts and limits. Model earned income first, then housing, then decide whether any leftover foreign tax should go on Form 1116.

Compliance notes

Claiming FEIE still usually requires a U.S. return and Form 2555. FBAR and Form 8938 reporting can apply based on account balances even when FEIE zeros out earned-income tax. Self-employed expats still face self-employment tax unless a totalization agreement or other rule applies.

Run the FEIE calculator with the 2026 ceiling, then use the bona fide vs physical presence tool to stress-test day counts before you rely on the exclusion.