Foreign Earned Income Exclusion UK Specialist 2026 |

Why the FEIE Decision Is the Most Misunderstood Election in UK-Resident American Tax Planning

The Foreign Earned Income Exclusion is often pitched in most online tax preparation tools as the obvious solution for Americans abroad. Exclude up to $130,000 of UK earned income from US tax. Sounds simple. The problem: for most UK-resident Americans, the FEIE is the wrong answer, and choosing it locks in worse outcomes that the Foreign Tax Credit route would have avoided entirely.

UK tax rates on earned income comfortably exceed US tax rates at most income levels — UK higher rate hits 40 percent at £50,271, and additional rate hits 45 percent at £125,140 in the 2025-26 UK tax year, while US federal rates max out at 37 percent, and that only kicks in at much higher income levels. The Foreign Tax Credit absorbs UK PAYE tax against US tax exposure on the same income under Article 23 of the US-UK Income Tax Convention. For most UK earners, the absorption produces zero underlying US tax owed without needing FEIE at all. Worse, claiming FEIE means foregoing the Foreign Tax Credit on the excluded income, leaving UK tax paid without US absorption.

A genuine foreign-earned income exclusion UK specialist 2026 approach starts by determining whether FEIE makes sense at all before discussing how to claim it. This piece walks through when FEIE actually works for UK-resident Americans, when the Foreign Tax Credit route works better, how the 2026 thresholds apply, where the revocation rule traps people, and what the typical specialist analysis looks like. Written for Americans living anywhere in the UK who want to understand the FEIE properly, rather than assume it's the right answer.

What Is the Foreign Earned Income Exclusion UK Specialist 2026 Framework?

The foreign earned income exclusion UK specialist 2026 framework rests on Internal Revenue Code Section 911, which allows qualifying US citizens and US resident aliens living abroad to exclude foreign earned income from US gross income up to an annual inflation-adjusted ceiling. The 2025 ceiling is $130,000, with the 2026 amount expected to be announced by the IRS in a Revenue Procedure in late 2025, reflecting the IRC Section 1(f)(3) inflation adjustment.

The election applies through Form 2555 Foreign Earned Income, attached to Form 1040. The Form 2555 reports foreign-earned income, claims the exclusion, and, where applicable, claims the additional housing exclusion or deduction under IRC Section 911(c). The housing component allows additional exclusion of qualifying foreign housing expenses above a base amount (16 percent of the FEIE ceiling) up to a ceiling that varies by foreign location.

Three substantive eligibility tests apply. Tax home in a foreign country under IRC Section 911(d)(3) — the principal place of business must be in a foreign country, and the taxpayer must not have an abode in the United States. Either the bona fide residence test under IRC Section 911(d)(1)(A) — establishing genuine residence in a foreign country for an uninterrupted period including a full tax year — or the physical presence test under IRC Section 911(d)(1)(B) — physical presence in a foreign country or countries during at least 330 full days during any consecutive 12-month period. Earned income from personal services rendered while in the foreign country — passive income from investments doesn't qualify.

For UK-resident Americans, the qualifying tests are typically satisfied through normal UK residence patterns. The IRS Form 2555 reference sits at https://www.irs.gov/forms-pubs/about-form-2555. The IRS Publication 54 reference for US citizens abroad provides a comprehensive overview at https://www.irs.gov/publications/p54.

Why the FEIE Decision Matters More Than Ever in 2026

Three substantive considerations make the 2026 FEIE positioning analysis more material than in recent years.

The 2025 FEIE ceiling of $130,000 is at its highest historical level relative to current US tax rates, which increases the apparent appeal of the FEIE election. The corresponding analysis under the Foreign Tax Credit framework needs to address whether UK tax paid would otherwise produce excess credit carryforward positions under IRC Section 904(c) — material for higher earners whose UK tax substantially substantially exceeds their their US tax exposure. The IRS reference for inflation adjustments sits at https://www.irs.gov/forms-pubs/about-publication-54.

The IRC Section 911(e)(2) revocation rule remains a substantive trap. Once the FEIE election is revoked (typically by ceasing to claim FEIE on a current return), the election cannot be re-elected for five tax years without IRS consent. UK-resident Americans whose situations change year-to-year (variable bonuses, equity vesting cycles, sabbatical years, partial-year UK residence) face material lock-in effects from poorly timed FEIE elections.

The new UK residence-based foreign income and gains framework, which replaces the non-dom regime from 6 April 2025, changes the broader cross-border positioning analysis for UK-resident Americans. The interaction between FEIE and the new UK framework requires careful analysis, as the previous remittance-basis positioning had simplified certain decisions. The HMRC reference sits at https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals.

The Core FEIE Analysis for UK-Resident Americans

When the FEIE Actually Works

The foreign earned income exclusion UK specialist 2026 analysis identifies specific scenarios in which FEIE positioning yields better outcomes than Foreign Tax Credit positioning under Article 23.

First, low UK tax exposure situations. UK-resident Americans whose UK income falls below the UK personal allowance plus the basic rate threshold may have minimal UK tax exposure, even on earned income. Where UK tax is genuinely low, Foreign Tax Credit absorption produces limited US tax reduction, while FEIE provides complete exclusion of earned income up to the ceiling. Specific cases: early-career UK roles below £35,000-£40,000, partial-year UK earnings (e.g., mid-year UK arrival), or income through structures producing minimal UK PAYE.

Second, IRA contribution positioning. The Foreign Tax Credit framework doesn't produce earned income for IRA contribution purposes under IRC Section 219, but FEIE-excluded income similarly doesn't count as earned income for IRA contribution purposes. The exception: amounts above the FEIE ceiling under partial exclusion retain earned income character for IRA contribution purposes. UK-resident Americans whose UK earnings exceed the FEIE ceiling can still make IRA contributions from the unexcluded portion.

Third, the positioning of the Child Tax Credit and the Additional Child Tax Credit. The American Rescue Plan Act provisions and subsequent legislation have made the refundable portion of the Child Tax Credit substantively valuable for qualifying US-resident-abroad families. The FEIE election doesn't disqualify the Child Tax Credit, but the underlying income calculation can materially shift the credit's positioning. Specialist analysis runs the comparison across both election routes.

Fourth, the alternative minimum tax (AMT) is outlined in IRC Section 55. FEIE-excluded income remains in the AMT calculation under specific rules, which can produce different outcomes than Foreign Tax Credit positioning, where the credit is absorbed against AMT exposure. For UK-resident Americans with substantial position complexity (incentive stock option exercises, large itemized deductions, specific preference items), the AMT analysis can materially affect the FEIE versus FTC decision.

When the Foreign Tax Credit Works Better

For most UK-resident Americans earning above £50,000 in UK-sourced income, the Foreign Tax Credit under IRC Section 901 and the US-UK Income Tax Convention Article 23 produce better outcomes than the FEIE election.

The UK higher rate of 40 percent on income between £50 and £125,140 substantially exceeds US federal rates of 22, 24, and 32 percent in the corresponding US income brackets. The excess UK tax above US tax exposure produces Foreign Tax Credit carryforward positions under IRC Section 904(c), with a 10-year carryforward period. The carryforward provides future-year absorption potential that FEIE election forfeits entirely.

The UK additional rate of 45 percent on income above £125,140 produces even more substantial excess credit positions. For UK-resident Americans earning £150,000+, the carry-forward credit accumulation often exceeds $30,000-$60,000 annually, which becomes available for future-year absorption against US-source income, passive income, or other US tax exposure.

The basket separation under IRC Section 904(d) means UK PAYE tax in the general category basket absorbs against US tax on UK employment income. Passive category basket positions (UK interest, UK dividends) operate separately. Specialist work addresses basket positioning to maximize absorption rather than treating Foreign Tax Credit as an automatic application.

The Revocation Rule Trap

IRC Section 911(e)(2) provides that once the FEIE election is revoked, it cannot be re-elected for five tax years without IRS consent. The rule produces substantial planning constraints where UK-resident American situations change year-to-year.

Revocation happens either explicitly (filing Form 2555, marking the box for revocation) or implicitly (filing a return claiming the Foreign Tax Credit on income that would have been FEIE-eligible). The implicit revocation rule catches taxpayers who switch between FEIE and FTC routes without specialist analysis — once switched away from FEIE, the five-year lock-in applies.

The IRS consent procedure for early re-election under Revenue Procedure 84-29 has a narrow application limited to specific qualifying circumstances. Most taxpayers facing the five-year lock-in cannot obtain consent for earlier re-election.

For UK-resident Americans whose long-term positioning consistently favors the Foreign Tax Credit route, the timing of the revocation matters less. For UK-resident Americans whose positioning genuinely varies year-to-year (variable bonus cycles, equity vesting patterns, partial-year UK residence, sabbatical years, anticipated US returns), the revocation rule creates substantial planning constraints that specialist work addresses through proper sequencing.

Step-by-Step: How Specialists Run the FEIE Analysis

Run the comprehensive income mapping for the relevant tax year. UK PAYE income, UK self-employment income, UK partnership income, UK passive income, US-source income, and any other income sources. The mapping determines which income categories actually qualify for FEIE, Foreign Tax Credit treatment, or neither.

Calculate the UK tax actually paid against the income subject to UK taxation. UK PAYE tax from P60 confirmation, UK Self Assessment balancing payment, and payments on account where applicable, UK tax on non-PAYE income through the Self Assessment system. The UK tax figure underpins the Foreign Tax Credit absorption analysis.

Calculate hypothetical US tax exposure on the same income. Federal income tax under IRC Section 1, FICA, where applicable, Net Investment Income Tax under IRC Section 1411, where applicable, and Additional Medicare Tax under IRC Section 1401, where applicable. The hypothetical US exposure determines maximum Foreign Tax Credit absorption.

Compare FEIE positioning outcomes against Foreign Tax Credit positioning outcomes. Under FEIE: earned income up to ceiling excluded, no Foreign Tax Credit on excluded income, separate Form 1116 for non-excluded income only, housing exclusion analysis under IRC Section 911(c). Unde, FTC: all UK-source income is subject to US tax with Foreign Tax Credit absorption, full basket-by-basket analysis under IRC Section 90 4(carry-forward provisions under IRC Section 904(c) for excess credit position)s.

Address the eligibility test selection between bona fide residence and physical presence. Bona fide residence test under IRC Section 911(d)(1)(A) — typically satisfied for UK-resident Americans with established UK life patterns, including UK home, UK family, UK employment. Physical presence test under IRC Section 911(d)(1)(B) — 330 full days in foreign countries during any consecutive 12-month period, more administrative tracking required.

Analyze the IRC Section 911(e)(2) revocation positioning. Where switching from FEIE to FTC, the five-year lock-in applies absent IRS consent under Revenue Procedure 84-29. When switching from FTC to FEIE, the election starts fresh, but the analysis must confirm that the FEIE route genuinely yields better outcomes, given the lock-in implications.

Coordinate with broader cross-border positioning. The FEIE versus FTC decision affects Article 17 treaty election positioning on UK pension contributions, IRA contribution eligibility, Child Tax Credit positioning, AMT exposure, and overall integrated cross-border outcomes. Specialist work integrates the FEIE decision into the broader planning framework rather than treating it as a standalone election. The IRS reference for international taxpayers sits at https://www.irs.gov/individuals/international-taxpayers.

Document the satisfaction of the eligibility test for the chosen route. Where bona fide residence applies, supporting documentation includes UK utility records, UK council tax records, UK NHS registration, UK employer records, and UK family ties documentation. Where physical presence applies, supporting documentation includes passport records, travel itineraries, and day-by-day calendar verification across the 12-month qualifying period.

Prepare Form 2555 with substantive accuracy where FEIE applies. Comprehensive income categorization, housing exclusion calculation under IRC Section 911(c) with proper base amount calculation (16 percent of FEIE ceiling) and proper UK-location ceiling. Attach Form 2555 to Form 1040 with proper line-by-line integration.

Calendar the ongoing FEIE positioning review. The FEIE versus FTC decision needs annual confirmation rather than set-and-forget treatment. Income variance year-to-year, life events, bonus cycles, and equity vesting patterns can shift the optimal positioning across tax years. Specialist work builds an annual review into the broader planning rhythm.

Real UK Expat Scenario — FEIE Analysis in Practice

Case Study: Sophia Reynolds — Edinburgh Software Engineer, Career-Stage Transition Affecting FEIE Positioning

Sophia Reynolds is a representative fictional profile. She's 34, a US citizen who moved from Austin, Texas, to Edinburgh in 2021 for a senior software engineering role at a UK-headquartered technology company. UK salary through PAYE has grown from £62,000 in 2021 to £128,000 in 2025, reflecting promotions and inflationary adjustments, plus an annual bonus typically £18,000-£35,000, and equity vesting under a four-year schedule that began producing material vesting value in 2024. Married to Callum (UK citizen, 33), one child born in Edinburgh in 2024.

Sophia's prior US tax preparation through TurboTax had claimed FEIE every year from 2021 onwards based on the software's default treatment of foreign earned income. The 2021 and 2022 returns produced reasonable outcomes — her UK income at £62,000 and £71,000 fell substantially within the FEIE ceiling, UK tax was modest given the income level, and the FEIE election produced near-zero US tax exposure. The 2023 return began to show signs of substantive misalignment as her UK income reached £92,000 and the bonus pushed total earned income above the FEIE ceiling. The 2024 return produced material under-absorption of UK tax against US tax exposure, as her UK earnings exceeded £105,000, plus bonus and equity vesting.

Sophia engaged US-UK Tax in November 2025 to review the FEIE positioning before filing her 2024 return on extension.

The position assessment over four weeks established the substantive analysis. UK 2024-25 income approximately £135,000 (PAYE salary £128,000 plus bonus £24,000 minus pre-tax pension contribution £17,000) plus equity vesting value $85,000 at vesting events across the year. UK tax paid through PAYE plus additional Self Assessment payments is approximately £42,800. Hypothetical US federal tax exposure on the equivalent USD income is approximately $32,400.

Under FEIE positioning: First $130,000 of foreign earned income excluded from US gross income (the 2024 ceiling). Earned income above the ceiling (approximately $52,000 equivant, including equity vesting) is subject to US tax, with Foreign Tax Credit absorption only on the corresponding UK tax. Hypothetical underlying US tax under FEIE positioning approximately $4,800 after partial credit absorption. The Form 1116 for the non-excluded portion resulted in limited absorption because the corresponding UK tax was also allocated proportionately.

Under Foreign Tax Credit positioning, all UK-source income is subject to US tax, with full absorption of UK tax under IRC Section 901 and Article 23 of the US-UK Income Tax Convention. UK tax of £42,800 (approximately $54,000 equivalent) absorbed comprehensively against US tax exposure of $32,400, producing zero underlying US tax owed and approximately $21,600 of Foreign Tax Credit carryforward under IRC Section 904(c) available for future years.

The Foreign Tax Credit positioning produced approximately $4,800 better outcome for the 2024 tax year alone, plus the carryforward credit position. Over a five-year projected horizon, the Foreign Tax Credit positioning was anticipated to produce a cumulative outcome $40,000+ better, assuming Sophia's UK income continued to grow alongside her career trajectory.

The substantive issue: switching from FEIE to FTC triggered the IRC Section 911(e)(2) five-year lock-in. US-UK Tax confirmed that Sophia's situation strongly favored FTC for the foreseeable horizon — UK income growth trajectory, anticipated continuation of equity vesting, and a family settlement in Edinburgh, making the position stable. The lock-in implications were acceptable given the projected positioning.

The 2024 Form 1040 was prepared with FEIE revocation via Form 2555 (revocation election with an explicit revocation notice attached) and full Foreign Tax Credit positioning via Form 1116. The amendment of the 2022 and 2023 returns to switch positioning was analyzed but ultimately not pursued — the prior FEIE positioning had produced reasonable outcomes for those years, and the amendment costs exceeded the marginal benefit.

Outcome: Zero underlying US tax for the 2024 tax year. Foreign Tax Credit carryforward of approximately $21,600 established under IRC Section 904(c) for future-year absorption. Article 17 treaty election through Form 8833 added for the UK workplace pension contribution position (previously missing under TurboTax preparation). Form 8938 FATCA disclosure added for Sophia's UK financial account positions, which had crossed the threshold during 2024. FBAR filed through the BSA E-Filing System covering UK accounts.

US-UK Tax fees: £4,800 covering the comprehensive FEIE versus FTC analysis, FEIE revocation positioning, 2024 Form 1040 preparation with full FTC positioning, Article 17 treaty election setup, Form 8938 disclosure, and FBAR preparation. Annual retainer thereafter: £3,200 reflecting the ongoing complexity of integrated US-UK compliance for Sophia's position.

Sophia's view six months into the engagement: "TurboTax had been defaulting me into FEIE without any analysis of whether it was actually the right answer. The 2021 and 2022 outcomes had reinforced the assumption that FEIE was working. The 2024 reality was that FEIE was costing me real money — approximately $4,800 for that year alone — plus the loss of the carry-forward credit position that the FTC route would have built up. Over five years, the projected difference is material. The specialist analysis was straightforward, but I'd never have run it through online preparation software. The revocation timing matters, and I'd never have known about the five-year lock-in without specialist input."

Contact US-UK Tax today at or 0333-8807974.

Common Mistakes Americans in the UK Make With the FEIE

Defaulting to FEIE through online preparation software without proper analysis. TurboTax, H&R Block Expat, and similar tools typically default to FEIE election based on assumed simplicity rather than substantive analysis. For most UK-resident Americans earning above £50,000, the Foreign Tax Credit route yields better outcomes than the default treatment, which misses entirely.

Missing the IRC Section 911(e)(2) revocation rule. Switching from FEIE to FTC triggers a five-year lock-in absent IRS consent under Revenue Procedure 84-29. Taxpayers who switch routes without understanding the lock-in implications can face material constraints when later circumstances would have benefited from FEIE re-election. The IRS reference sits at https://www.irs.gov/forms-pubs/about-form-2555.

Treating FEIE as covering all foreign income. FEIE applies only to foreign earned income from personal services. Foreign passive income (interest, dividends, capital gains, rental income) doesn't qualify for FEIE — only Foreign Tax Credit positioning applies to these categories. Taxpayers who believe the FEIE covers their UK investment or rental income face a substantive underpayment exposure.

Missing the housing exclusion calculation under IRC Section 911(c). The housing exclusion provides an additional excluded amount above the base FEIE ceiling for qualifying foreign housing expenses. The base amount equals 16 percent of the FEIE ceiling. The location-specific ceiling for London (a high-cost location designated by the IRS) substantially exceeds the standard housing ceiling. UK-resident Americans claiming FEIE without analyzing the housing exclusion miss out on substantial additional exclusion potential.

Claiming FEIE in years where the physical presence test isn't satisfied. The 330-day requirement under IRC Section 911(d)(1)(B) needs full physical presence in foreign countries during the qualifying 12-month period. Significant US travel days, US business trips, or US family visits can reduce the number of qualifying days to below 330. Taxpayers who claim FEIE in years when the physical presence test fails (and the bona fide residence test doesn't apply independently) face audit and adjustment risks.

Failing to integrate FEIE with Foreign Tax Credit on non-excluded income. Where UK earned income exceeds the FEIE ceiling, the non-excluded portion requires proper Foreign Tax Credit positioning on Form 1116, with appropriate UK tax allocation under the IRS-specific allocation rules. Taxpayers who claim FEIE without proper allocation on the non-excluded portion produce inaccurate returns that may require amendment.

How US-UK Tax Helps With the 2026 FEIE Analysis

US-UK Tax operates as a specialist cross-border practice with US Enrolled Agent status under IRS Circular 230, providing direct IRS representation rights; UK chartered tax adviser credentials through the Chartered Institute of Taxation; and full Anti-Money Laundering supervision under the UK regulatory framework. The practice handles FEIE positioning analysis as part of integrated cross-border tax work for Americans living in the UK.

The FEIE positioning service covers comprehensive income mapping across UK and US categories, UK tax calculation against income subject to UK taxation, hypothetical US tax exposure calculation, comparative analysis between FEIE positioning under IRC Section 911 and Foreign Tax Credit positioning under IRC Section 901 and Article 23 of the US-UK Income Tax Convention, eligibility test selection between bona fide residence under IRC Section 911(d)(1)(A) and physical presence under IRC Section 911(d)(1)(B), IRC Section 911(e)(2) revocation positioning where switching between routes, housing exclusion analysis under IRC Section 911(c) where FEIE applies, Form 2555 preparation where FEIE applies, Form 1116 preparation with proper basket separation under IRC Section 904(d) where Foreign Tax Credit applies, integration with Article 17 treaty election positioning for UK pension contributions, IRA contribution analysis, Child Tax Credit positioning, AMT analysis under IRC Section 55 where applicable, and ongoing annual review of FEIE versus FTC positioning across changing circumstances.

The integrated approach addresses FEIE as part of broader cross-border planning rather than treating it as a standalone election. The specialist work distinguishes between situations where FEIE produces genuinely better outcomes and those where Foreign Tax Credit positioning produces better outcomes — the comparison drives the recommendation rather than the default treatment.

Standard FEIE analysis engagements within broader compliance work run £3,200 to £6,400 for the comparative analysis and election positioning. Where the engagement extends to comprehensive, integrated cross-border compliance and planning, the broader engagement ranges from £6,400 to £18,400, depending on position complexity.

Contact US-UK Tax today at or 0333-8807974.

Conclusion

Three things worth holding onto. For most UK-resident Americans earning above £50,000 in UK earned income, the Foreign Tax Credit under IRC Section 901 and Article 23 of the US-UK Income Tax Convention produces better outcomes than the foreign earned income exclusion UK specialist 2026 election under IRC Section 911 — UK tax rates at higher rate (40 percent) and additional rate (45 percent) comfortably exceed corresponding US federal rates, producing comprehensive credit absorption plus carryforward credit positions under IRC Section 904(c) that FEIE election forfeits entirely. The IRC Section 911(e)(2) revocation rule creates a five-year lock-in once switched away from FEIE that needs proper sequencing for taxpayers whose long-term positioning genuinely benefits from one route or the other — switching back and forth between routes isn't available absent IRS consent under Revenue Procedure 84-29. And online preparation software typically defaults to the FEIE election without substantive analysis, resulting in under-absorption of UK tax for higher-earning UK-resident Americans whose situations actually favor Foreign Tax Credit positioning —a proper analysis and proper comparison addresses the broader integration implications of the Article 17 treaty positioning, PFIC analysis, IRA contribution positioning, Child Tax Credit, and AMT exposure that the FEIE versus FTC decision affects across the integrated cross-border position. Contact US-UK Tax today at or 0333-8807974.

FAQs

Q: Should I claim FEIE or Foreign Tax Credit on my UK-earned income?

For most UK-resident Americans earning above £50,000 in UK earned income, the Foreign Tax Credit under IRC Section 901 produces better outcomes than FEIE under IRC Section 911. UK tax rates at higher rate (40 percent) and additional rate (45 percent) comfortably exceed corresponding US federal rates, producing full credit absorption plus carryforward credit positions under IRC Section 904(c). For UK-resident Americans earning below £40,000, FEIE often produces better results due to lower UK tax exposure. The IRS Form 2555 reference sits at https://www.irs.gov/forms-pubs/about-form-2555.

Q: What is the FEIE limit for 2025 and 2026?

The 2025 FEIE ceiling under IRC Section 911 sits at $130,000. The 2026 amount will be announced by the IRS through Revenue Procedure publication in late 2025, reflecting the IRC Section 1(f)(3) inflation adjustment — typically producing an inflation-adjusted increase of $4,000-$6,000 over the prior year. The housing exclusion under IRC Section 911(c) provides an additional exclusion amount above the FEIE ceiling for qualifying foreign housing expenses, with location-specific ceilings for high-cost locations, including London.

Q: Can I switch from FEIE to Foreign Tax Credit and back again?

Not freely. IRC Section 911(e)(2) provides that once the FEIE election is revoked, it cannot be re-elected for five tax years without IRS consent under Revenue Procedure 84-29. The IRS consent procedure has a narrow application limited to specific qualifying circumstances. Most taxpayers facing the five-year lock-in cannot obtain consent for earlier re-election. The substantive planning implication is that is that switching routes requires careful long-term positioning analysis rather than year-to-year flexibility.

Q: Do I need to file Form 2555 if I'm claiming Foreign Tax Credit instead?

No. Form 2555 is the FEIE claim form under IRC Section 911. If you're claiming Foreign Tax Credit under IRC Section 901 instead, you file Form 1116 Foreign Tax Credit rather than Form 2555. The two forms address different elections and don't both apply to the same income simultaneously. Where FEIE excludes earned income up to the ceiling, the non-excluded portion (income above the ceiling) can still claim Foreign Tax Credit through Form 1116 with proper UK tax allocation under IRS-specific allocation rules.

Q: How does the physical presence test work for UK residents traveling to the US?

The physical presence test under IRC Section 911(d)(1)(B) requires 330 full days in foreign countries during any consecutive 12-month period. Days in the US (including business travel, family visits, and transit through US airports) reduce the qualifying foreign-country day count. UK-resident Americans with substantial US business travel can fail the physical presence test in specific years, even where their broader UK residence pattern is stable. Most UK-resident Americans rely instead on the bona fide residence test under IRC Section 911(d)(1)(A), which addresses established UK residence rather than daily counting. The IRS reference sits at https://www.irs.gov/individuals/international-taxpayers.

Q: Does the FEIE election affect my eligibility for the Child Tax Credit?

The FEIE election doesn't disqualify the Child Tax Credit, but it affects the underlying income calculation in ways that can materially shift the credit's positioning. The refundable Additional Child Tax Credit under IRC Section 24(d) interacts with the FEIE-excluded income in specific ways that can either help or hurt the overall position, depending on the taxpayer's circumstances. Specialist analysis compares the Child Tax Credit and Foreign Tax Credit positioning with the Child Tax Credit to identify the better-integrated reference set at https://www.irs.gov/credits-deductions/individuals/child-tax-credit.