When should I revoke the Foreign Earned Income Exclusion?

Revoking the Foreign Earned Income Exclusion (FEIE) and opting for the Foreign Tax Credit (FTC) instead can sometimes provide greater financial advantages for US expats. For example:

• When you want to claim the Child Tax Credit.
• When you want to contribute to an IRA.
• When your host country’s tax rate is higher than the US.

Note that if you previously excluded your foreign earned income, that choice remains in effect unless you revoke it.