Irs Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abroad

You would include the amount of the reimburse-

In this example, if you met the physical

has more information for U.S. Government em-

presence test for a period that included

ployees abroad.

ment in income in 2008, the year you received it.

TIP

at least 120 days in 2008, the moving

Move between foreign countries. If you

expense reimbursement would be considered

move between foreign countries, any moving

Exclusion of

earned entirely in the year of the move.

expense reimbursement that you must include

Meals and Lodging

Storage expense reimbursements. If you

in income will be considered earned in the year

are reimbursed for storage expenses, the reim-

You do not include in your income the value of

of the move if you qualify for the foreign earned

bursement is for services you perform during the

meals and lodging provided to you and your

income exclusion for a period that includes at

period of time for which the storage expenses

family by your employer at no charge if the

least 120 days in the year of the move.

are incurred.

following conditions are met.

Move to U.S. If you move to the United

States, the moving expense reimbursement that

1. The meals are furnished:

U.S. Government Employees

you must include in income is generally consid-

a. On the business premises of your em-

ered to be U.S. source income.

ployer, and

For purposes of the foreign earned income ex-

However, if under either an agreement be-

clusion, the foreign housing exclusion, and the

b. For the convenience of your employer.

tween you and your employer or a statement of

foreign housing deduction, foreign earned in-

company policy that is reduced to writing before

come does not include any amounts paid by the

2. The lodging is furnished:

your move to the foreign country, your employer

United States or any of its agencies to its em-

will reimburse you for your move back to the

ployees. This includes amounts paid from both

a. On the business premises of your em-

United States regardless of whether you con-

appropriated and nonappropriated funds.

ployer,

tinue to work for the employer, the includible

The following organizations (and other orga-

b. For the convenience of your employer,

reimbursement is considered compensation for

nizations similarly organized and operated

and

past services performed in the foreign country.

under United States Army, Navy, or Air Force

c. As a condition of your employment.

The includible reimbursement is considered

regulations) are integral parts of the Armed

Forces, agencies, or instrumentalities of the

earned in the year of the move if you qualify for

If these conditions are met, do not include

United States.

the foreign earned income exclusion for a period

the value of the meals or lodging in your income,

that includes at least 120 days during that year.

•

United States Armed Forces exchanges.

even if a law or your employment contract says

Otherwise, you treat the includible reimburse-

•

that they are provided as compensation.

Commissioned and noncommissioned of-

ment as received for services performed in the

Amounts you do not include in income be-

ficers’ messes.

foreign country in the year of the move and the

cause of these rules are not foreign earned

•

year immediately before the year of the move.

Armed Forces motion picture services.

income.

See the discussion under Move from U.S. to

•

If you receive a Form W-2, excludable

Kindergartens on foreign Armed Forces in-

foreign country (earlier) to figure the amount of

amounts should not be included in the total re-

stallations.

the includible reimbursement considered

ported in box 1 as wages.

earned in the year of the move. The amount

Amounts paid by the United States or its

Family. Your family, for this purpose, includes

agencies to persons who are not their employ-

earned in the year before the year of the move is

only your spouse and your dependents.

ees may qualify for exclusion or deduction.

the difference between the total includible reim-

Lodging. The value of lodging includes the

If you are a U.S. Government employee paid

bursement and the amount earned in the year of

cost of heat, electricity, gas, water, sewer serv-

by a U.S. agency that assigned you to a foreign

the move.

ice, and similar items needed to make the lodg-

government to perform specific services for

ing fit to live in.

Example. You are a U.S. citizen employed

which the agency is reimbursed by the foreign

government, your pay is from the U.S. Govern-

in a foreign country. You retired from employ-

Business premises of employer. Generally,

ment and does not qualify for exclusion or de-

ment with your employer on March 31, 2008,

the business premises of your employer is wher-

duction.

and returned to the United States after having

ever you work. For example, if you work as a

If you have questions about whether you are

been a bona fide resident of the foreign country

housekeeper, meals and lodging provided in

an employee or an independent contractor, get

for several years. A written agreement with your

your employer’s home are provided on the busi-

Publication 15-A, Employer’s Supplemental Tax

ness premises of your employer. Similarly,

employer entered into before you went abroad

Guide.

meals provided to cowhands while herding cat-

provided that you would be reimbursed for your

tle on land leased or owned by their employer

move back to the United States.

American Institute in Taiwan. Amounts paid

are considered provided on the premises of their

In April 2008, your former employer reim-

by the American Institute in Taiwan are not for-

employer.

bursed you $2,000 for the part of the cost of your

eign earned income for purposes of the foreign

Convenience of employer. Whether meals

move back to the United States that you were

earned income exclusion, the foreign housing

or lodging are provided for your employer’s con-

not allowed to deduct. Because you were not a

exclusion, or the foreign housing deduction. If

venience must be determined from all the facts

bona fide resident of a foreign country or coun-

you are an employee of the American Institute in

and circumstances. Meals furnished at no

tries for a period that included at least 120 days

Taiwan, allowances you receive are exempt

charge are considered provided for your em-

from U.S. tax up to the amount that equals

in 2008 (the year of the move), the includible

ployer’s convenience if there is a good business

tax-exempt allowances received by civilian em-

reimbursement is considered pay for services

reason for providing them, other than to give you

ployees of the U.S. Government.

performed in the foreign country for both 2008

more pay.

and 2007.

On the other hand, if your employer provides

Allowances. Cost-of-living and foreign-area

You figure the part of the moving expense

meals to you or your family as a means of giving

allowances paid under certain acts of Congress

reimbursement for services performed in the

you more pay, and there is no other business

to U.S. civilian officers and employees stationed

foreign country for 2008 by multiplying the total

reason for providing them, their value is extra

in Alaska and Hawaii or elsewhere outside the

income to you because they are not furnished

includible reimbursement by a fraction. The frac-

48 contiguous states and the District of Colum-

for the convenience of your employer.

tion is the number of days of foreign residence

bia can be excluded from gross income. Post

during the year (90) divided by the number of

differentials are wages that must be included in

Condition of employment. Lodging is pro-

days in the year (366). The remaining part of the

gross income, regardless of the act of Congress

vided as a condition of employment if you must

includible reimbursement is for services per-

under which they are paid.

accept the lodging to properly carry out the du-

formed in the foreign country in 2007. You report

ties of your job. You must accept lodging to

the amount of the includible reimbursement in

More information. Publication 516, U.S. Gov-

properly carry out your duties if, for example,

2008, the year you received it.

ernment Civilian Employees Stationed Abroad,

you must be available for duty at all times or you

Chapter 4 Foreign Earned Income and Housing: Exclusion – Deduction

Page 18

Irs Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abroad - 2008 Page 18

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