Physical Presence Test

Qualify for Tax Benefits and Reduce Your U.S. Tax Liability

For U.S. citizens and green card holders living abroad, qualifying for tax exclusions and credits is essential to avoiding unnecessary taxation. The Physical Presence Test (PPT) is one of the key ways expatriates can qualify for the Foreign Earned Income Exclusion (FEIE)—allowing them to exclude up to $120,000 (2023 tax year) of foreign-earned income from U.S. taxation.

At eTaxGlobal, we help expats navigate the Physical Presence Test with precision and strategy, ensuring they qualify and maximize their tax benefits. Whether you’re on an international work assignment, a digital nomad, or operating a business abroad, our team ensures you meet IRS requirements while keeping more of your income.

Find Out If You Qualify.

What Is the Physical Presence Test?

The Physical Presence Test determines whether a U.S. taxpayer qualifies for the Foreign Earned Income Exclusion (FEIE) based on time spent in a foreign country.

To qualify, you must:

Be physically present in a foreign country for at least 330 full days within a rolling 12-month period (not necessarily a calendar year).

Establish a tax home in a foreign country during this period.

The 330-day requirement applies to full 24-hour periods spent inside a foreign country—partial days, time spent traveling over international waters, or stopovers in the U.S. do not count toward the total. Even a single miscalculated travel day can disqualify your FEIE claim, leading to a significant tax bill.

Tracking travel days correctly is critical—let our experts ensure your eligibility.

Understanding Your Tax Home

A tax home is the primary location where you conduct business, work, or earn income—not necessarily where you maintain a residence. Establishing a tax home abroad is essential for qualifying under the Physical Presence Test.

Proof of a foreign tax home may include:

However, you cannot have a U.S. abode while claiming a tax home abroad. The IRS considers an abode to be where your economic, family, and personal ties are strongest. If you frequently return to the U.S. or maintain a home there, your tax home may be questioned.

Example: Who Qualifies for the Physical Presence Test?

Qualifies

An employee is sent by their U.S. company to work in Ireland for 18 months. They move their family, rent a home, and open local bank accounts. Even though they plan to return to the U.S., they meet the PPT criteria and can claim the FEIE.

Does Not Qualify

A rotational oil rig worker spends six weeks abroad and six weeks in the U.S. throughout the year. Since they maintain a U.S. abode and don’t meet the 330-day rule, they do not qualify for the FEIE under the PPT.

Ensure Your Tax Home Meets IRS Standards.

Who Should Use the Physical Presence Test?

The Physical Presence Test is ideal for U.S. expats who:

If you intend to stay abroad indefinitely and establish permanent residency, you may qualify for the Bona Fide Residence Test (BFR) instead. We help determine the best method for maximizing your tax benefits.

Not sure which test applies to you? We’ll guide you through it.

What If You Don’t Qualify at Tax Time?

If you haven’t met the 330-day requirement by the tax deadline but will qualify within the next few months, you can file an extension using Form 2350. This allows extra time to meet the PPT requirements and claim the FEIE, potentially saving thousands in taxes.

Missing this deadline could mean losing out on significant tax benefits—don’t risk overpaying.

Let Us Handle Your Extension.

Maximize Your Tax Savings with eTaxGlobal

At eTaxGlobal, we ensure you:

International tax laws are complex, but with expert guidance, you can keep more of your earnings while staying IRS-compliant. Let’s make sure you qualify.

Get Started Today!