Expats who pass the Bona Fide Residence Test are eligible for tax exclusions and benefits like:
- The Foreign Earned Income Exclusion
- The Foreign Housing Exclusion and/or
- The Foreign Housing Deduction
Who is eligible for Bona Fide Residence Test?
- US citizens/US resident aliens who are residents of a foreign country that has an income tax treaty with the US
- Expats who have an established residence in a foreign country.
- Expats who have been living within the host country for an entire tax year (January 1-December 31)
- Expats who have no plans to move back to the US soon
Who is Not Eligible?
The following reasons are why someone could not be eligible for the Bona Fide Residence Test:
- You tell the foreign authorities that you are not a resident of your host country
- The foreign government does not make you subject to their country’s taxes, or
- The foreign authorities have not finalized your tax status and/or foreign residency within the country