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ELF critical diagnostic: Enter a minimum of 330 foreign days for the taxpayer to qualify for physical presence

Enter a minimum of 330 foreign days for the taxpayer to qualify for physical presence.

Solution

Open the U.S. business days and travel information on the 2555 screen in the Foreign Exclusion folder. Verify that the foreign days entered total 330 or more. When entering dates, enter the dates before and after the current tax year when they apply. If days entered equal less than 330, determine if you're using the physical presence test or the bona fide residence test and review the following information.

Physical presence test

If you're using the physical presence test to determine the taxpayer's eligibility to take the foreign earned income exclusion, follow these steps.
  1. Go to the Part III - Physical Presence Test section of the 2555 screen.
  2. Verify the
    Principal country of employment
     is entered.
  3. If dates are entered in the
    Physical presence test from date
     or
    Physical Presence Test through date
     fields, verify the period equals 330 or more days. If the physical presence test started in a previous year, enter the date from the previous year. If the physical presence test ends in a future year, enter the future year date that would satisfy the 330-day requirement.

Bona fide residence test

If you're using the bona fide resident test to determine the taxpayer's eligibility to take the foreign earned income exclusion, and the foreign days entered in the
U.S. business days and travel information
 statement don't equal 330 or more, follow these steps.
note
Use the following to determine whether you're using the bona fide resident test to determine eligibility instead of the physical presence test:
  • In the Part II - Bona Fide Residence Test Section, if the
    Force bona fide residence test
     field is marked with an
    X
    , the bona fide residence test is used.
  • In the Forms view, go to Form 2555 and verify whether Part II (located on page 1) or Part III (located on page 2) is generating. If Part II is completed, you're using the bona fide residence test to determine the taxpayer's eligibility.
  1. Go to the Part III - Physical Presence Test section of the 2555 screen.
  2. Verify that all fields in this section are cleared. This includes the
    Principal country of employment
     field.

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