A U.S. citizen has lived and worked abroad for the entire 2025 calendar year but does not meet the bona fide residence test. Under IRC Section 911, can this individual still qualify for the Foreign Earned Income Exclusion, and if so how?
- No, because the bona fide residence test is the only way to qualify for the exclusion under Section 911
- Yes, but only if the individual also renounces U.S. citizenship for the year, since the exclusion is unavailable to citizens who maintain a U.S. domicile
- Yes, the individual can instead qualify under the physical presence test by being physically present in a foreign country or countries for at least 330 full days during any 12-consecutive-month period
- Yes, automatically, because every U.S. citizen who earns income from work performed entirely outside the United States qualifies for the exclusion regardless of any residency or presence test
Why C? And why not the others?
Correct answer: C. Yes, the individual can instead qualify under the physical presence test by being physically present in a foreign country or countries for at least 330 full days during any 12-consecutive-month period
IRC Section 911 offers two independent ways to become a 'qualified individual' eligible for the Foreign Earned Income Exclusion (up to $130,000 for 2025): the bona fide residence test, which requires an uninterrupted period abroad that includes an entire tax year, or the physical presence test, which requires being physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months; meeting either test alone is sufficient. The option claiming bona fide residence is the only path is wrong because the physical presence test is an equally valid, independent alternative that does not require a full tax year of foreign residence. The option requiring renunciation of U.S. citizenship is wrong because Section 911 applies specifically to U.S. citizens (and certain resident aliens) who remain citizens; renouncing citizenship is unrelated to exclusion eligibility and instead raises entirely separate expatriation tax consequences. The option claiming automatic qualification for any citizen working abroad is wrong because eligibility is never automatic — the individual must actually satisfy one of the two specific tests; performing work outside the United States alone is not enough.
Source: IRC Section 911; IRS, 'Figuring the Foreign Earned Income Exclusion'