IRS Waives FEIE Time Requirements for Expats in 7 Countries

If you were forced to leave a foreign country in 2025 due to war, civil unrest, or unsafe conditions, you may still qualify for the Foreign Earned Income Exclusion (FEIE) even if you did not meet the standard time requirements.

Under Revenue Procedure 2026-16, the IRS officially waived the physical presence and bona fide residence requirements for Americans who departed certain countries due to adverse conditions.

This relief ensures expats are not penalized when circumstances beyond their control disrupt their ability to qualify for tax benefits.

Countries Covered Under the 2025 FEIE Waiver

The IRS identified seven countries where conditions required evacuation or early departure. The waiver applies if you were present in the country on or before the specified date and left due to those conditions.

  • Haiti – on or after January 1, 2025
  • Ukraine – on or after January 1, 2025
  • Democratic Republic of the Congo – on or after January 28, 2025
  • South Sudan – on or after March 7, 2025
  • Iraq – on or after June 11, 2025
  • Lebanon – on or after June 22, 2025
  • Mali – on or after October 30, 2025

To qualify, you must have been living or working in the country on or before the listed date.

What the FEIE Waiver Allows

Normally, expats must meet one of two tests to claim the FEIE:

Physical Presence Test

You must spend at least 330 full days outside the United States in a 12-month period.

Bona Fide Residence Test

You must be a resident of a foreign country for an entire tax year.

When these requirements cannot be met due to forced departure, the IRS may waive them under Section 911(d)(4).

With the waiver, you may still:

  • Exclude qualifying foreign income (up to $130,000 for 2025, prorated)
  • Claim the Foreign Housing Exclusion
  • Maintain eligibility for expat tax benefits

Who Qualifies for the Waiver?

You may qualify if:

  • You established residence or physical presence before the IRS-designated date
  • You left due to adverse conditions such as war or civil unrest
  • You intended to meet the FEIE requirements before your departure

The waiver is not automatic. You must demonstrate that you would have qualified under normal circumstances.

Example Scenario

An American working in Lebanon since 2023 leaves in July 2025 due to escalating conflict. Although they did not meet the full residency or 330-day requirement, they can still claim the FEIE for the period they lived and worked there.

However, someone who arrived after the IRS-designated date would not qualify for this relief.

How to Claim the FEIE Waiver

To claim the waiver:

  • File Form 2555 with your tax return
  • Indicate you are claiming relief under Section 911(d)(4)
  • Include the country and relevant dates
  • Report your foreign income accurately

If you already filed without claiming the FEIE, you may submit an amended return using Form 1040-X.

Interaction With the Foreign Tax Credit

The FEIE waiver allows you to exclude income, but you may also be eligible for the Foreign Tax Credit (FTC) if you paid taxes abroad.

In some cases, the FTC may provide greater benefits than the FEIE depending on local tax rates. A careful comparison is important.

To better understand your options, visit our expat tax services page.

Documentation You Should Keep

To support your claim, maintain records such as:

  • Employment contracts or assignment letters
  • Lease agreements or housing documentation
  • Travel records showing entry and departure
  • Employer or embassy communications
  • Government advisories or news reports
  • Proof of your established presence abroad

These documents help demonstrate that you intended to meet FEIE requirements.

Key Takeaways

  • IRS Revenue Procedure 2026-16 applies to the 2025 tax year
  • Seven countries are covered under the waiver
  • You must have been present before the designated date
  • The waiver allows you to still claim FEIE benefits
  • Proper documentation and filing are essential

What This Means for Expats

This relief protects Americans who were forced to leave unstable regions by ensuring they do not lose access to valuable tax benefits.

If you were affected, it is important to correctly apply the waiver and document your eligibility. Missing this step could result in unnecessary tax liability.

Get Help With Your 2025 Filing

If you lived in one of the affected countries or are unsure whether you qualify, professional guidance can help ensure your return is accurate and optimized.

Learn more about how we support Americans abroad through our U.S. expat tax preparation services.

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