How to Pass the Physical Presence Test: Your Day-Counting Guide
- What Is the Physical Presence Test?
- What Counts as a "Full Day" Abroad?
- What Locations Qualify as "Foreign Countries"?
- How Do I Choose My 12-Month Period?
- What If I Only Qualify for Part of the Year?
- How Do Flights and Layovers Work?
- What Documentation Do I Need?
- How Do I File Form 2555?
- What Common Mistakes Should I Avoid?
- What If I'm Close But Don't Quite Make It?
- Can I Use This Test Every Year?
- Get Expert Help Passing the Physical Presence Test
- Related Resources
IRS data from 2016 to 2021, show that 62% of Americans filing from abroad owe $0 in federal taxes after applying available exclusions, such as the Foreign Earned Income Exclusion. The Physical Presence Test offers the most straightforward path to this exclusion: spend 330 full days outside the U.S. in any 12-month period, and you can exclude up to $130,000 of foreign earned income from U.S. taxation.
This guide walks you through the mechanics of counting days, choosing your qualifying period, and documenting your time abroad so you can pass the test and reduce your U.S. tax bill.
What Is the Physical Presence Test?
The Physical Presence Test is one of two ways you can qualify for the Foreign Earned Income Exclusion (FEIE). It’s a purely mathematical test based on counting days spent abroad—no questions about your intentions, residency status, or whether you plan to return to the U.S.
Core Requirement:
Be physically present in one or more foreign countries for at least 330 full days during any 12-month period.
Unlike the Bona Fide Residence Test, which requires you to establish genuine residence in a foreign country for a full tax year with the intent to stay, the Physical Presence Test focuses only on where you spend your time. You don’t need to prove permanent residence, sign long-term leases, or demonstrate ties to one location.
Who can use this test:
- U.S. citizens working abroad
- U.S. resident aliens (green card holders) living overseas
- Digital nomads moving between countries
- Contractors on temporary foreign assignments
- Anyone who travels frequently and doesn’t maintain one fixed foreign home
What you need to qualify:
- A tax home in a foreign country during your qualifying period (your principal place of business or employment must be abroad)
- 330 full days (complete 24-hour periods) spent in foreign countries
- Foreign earned income from work performed abroad (salaries, wages, bonuses, self-employment income)
- Any consecutive 12-month period that includes part of the tax year (it doesn’t need to match the calendar year)
What income qualifies: Only earned income from work performed in foreign countries qualifies for the exclusion. Passive income, like dividends, interest, rental income, pensions, and capital gains, doesn’t qualify for the FEIE.
The benefit: For the 2025 tax year, passing this test lets you exclude up to $130,000 of foreign earned income from U.S. taxation. If you’re married and both spouses qualify, you can exclude up to $260,000 in combined income.
What Counts as a “Full Day” Abroad?
The IRS defines a full day as a complete 24-hour period from midnight to midnight spent entirely in one or more foreign countries. This strict definition creates three critical rules:
- Arrival days don’t count. If you land in London at 2:00 PM, your first full day abroad starts at midnight that night. The hours between your arrival and midnight don’t qualify.
- Departure days don’t count. If you leave Paris at 11:00 PM on that day, it doesn’t count as a full day abroad because you weren’t there for the complete 24-hour period.
- Partial U.S. days break the count. If you’re in the U.S. for even one minute during a 24-hour period, that entire day doesn’t count toward your 330 days abroad.
What Locations Qualify as “Foreign Countries”?
Most locations outside the U.S. count, but important exceptions exist:
Don’t count: U.S. territories (Puerto Rico, Guam, Virgin Islands), Antarctica, international waters, or countries where you’re present in violation of U.S. law.
Do count: Any recognized foreign country, multiple countries combined, and travel between foreign countries if under 24 hours.
How Do I Choose My 12-Month Period?
Your qualifying period must be 12 consecutive months, but it doesn’t need to match the calendar year. You can start your 12-month period on any date, providing flexibility to maximize your exclusion.
Strategy: Pick the Period That Captures the Most Days
If you moved abroad mid-year or made trips back to the U.S., you might qualify under different 12-month periods. Test multiple windows to find which one gives you 330+ days.
Example: You moved to Germany on March 15, 2025, and returned to the U.S. for two weeks in October 2025. You could count:
- March 16, 2025, to March 15, 2026 (avoids October trip if you stay abroad)
- April 1, 2025, to March 31, 2026 (alternative window)
The period you choose gets reported on Form 2555, line 16. Choose strategically before you file.
What If I Only Qualify for Part of the Year?
If your 12-month qualifying period includes only part of 2025, the IRS prorates your exclusion based on qualifying days that fall within the tax year.
Proration formula: ($130,000 ÷ 365) × qualifying days in 2025 = your maximum exclusion
Example: You qualify from September 1, 2025, to August 31, 2026. Only 122 days (September 1 – December 31, 2025) fall within your 2025 tax year.
Your 2025 exclusion: ($130,000 ÷ 365) × 122 = $43,452
The remaining days in your qualifying period will be applied to your 2026 tax return. This is why choosing your 12-month period strategically matters.
How Do Flights and Layovers Work?
Travel days create the most confusion when counting days abroad.
U.S. Layovers Under 24 Hours
If you fly Paris → JFK (5-hour layover) → Mexico City, that day doesn’t count as a full day abroad (you were in the U.S.), but it also doesn’t count as a U.S. day for other tax purposes since you were transiting.
Travel Between Foreign Countries
Moving between foreign countries doesn’t break your streak as long as the travel takes less than 24 hours. If travel takes 24+ hours and passes through international waters or airspace, you lose those days.
Example: You leave London at 11:00 PM on July 6 and arrive in Stockholm at 5:00 AM on July 7. Your trip takes less than 24 hours. You lose no full days.
What Documentation Do I Need?
The IRS can audit your Physical Presence Test claim and request proof. Keep these records organized:
Essential documentation:
- Passport with entry/exit stamps
- Flight itineraries and boarding passes
- Hotel reservations and receipts
- Lease agreements or rental contracts
- Employment contracts showing a foreign work location
- Bank statements showing foreign transactions
- Phone records or app data showing location history
Use a tracking app or spreadsheet to log your location each day as you go. Reconstructing months of travel from memory after tax season risks expensive errors.
How Do I File Form 2555?
Report your Physical Presence Test qualification on Form 2555, Part III:
Line 16: Enter your 12-month qualifying period (strategically chosen)
Line 17: List your principal country of employment
Line 18: Document all travel during your qualifying period, including:
- Dates of arrival and departure from each country
- Number of days in each location
- Purpose of travel
- Income earned during U.S. trips (which doesn’t qualify for exclusion)
If you had no travel between countries, you can write “Physically present in a foreign country for the entire 12-month period.”
What Common Mistakes Should I Avoid?
1. Miscounting by One Day
Arriving on March 15 means your first full day is March 16. Departing on December 1 means November 30 is your last full day. Off-by-one errors can cost you the entire exclusion if you land at exactly 330 days.
2. Forgetting the Tax Home Requirement
Passing the day count isn’t enough. You also need a tax home in a foreign country during your qualifying period. Your tax home is where your principal place of business or employment is located. If you’re working remotely for a U.S. company while traveling, consult a tax professional about whether you meet the tax home test.
3. Not Planning for Emergencies
If war, civil unrest, or similar adverse conditions force you to leave a foreign country before reaching 330 days, the IRS may waive the time requirement. You must demonstrate that you reasonably expected to meet the test but couldn’t due to the adverse conditions. Write “Claiming Waiver” on page 1 of Form 2555 and attach an explanation.
What If I’m Close But Don’t Quite Make It?
If you have 320 days in one 12-month period, you have options:
- Try a different 12-month period. Shifting your window by a few weeks might capture different U.S. trips and get you over 330 days.
- Consider the Bona Fide Residence Test instead. If you’ve established genuine residence abroad for a full tax year, this alternative qualification method might work better for your situation.
- File Form 2350 for more time. If you’ll reach 330 days after the filing deadline, request an extension to file once you qualify.
Can I Use This Test Every Year?
Yes. Unlike the Bona Fide Residence Test, which requires establishing residence, the Physical Presence Test is purely mathematical in nature. Meet the 330-day requirement in any 12-month period, and you qualify for that period. You can use it year after year as long as you continue meeting the day count.
This makes the Physical Presence Test ideal for digital nomads, frequent travelers, or anyone who doesn’t want to establish permanent residence in a single foreign country.
Get Expert Help Passing the Physical Presence Test
One miscounted day or poorly chosen 12-month period can cost you the entire $130,000 exclusion. Our CPAs and Enrolled Agents specialize in maximizing the Foreign Earned Income Exclusion for Americans abroad.
We’ll help you choose the optimal qualifying period, document your days abroad properly, and file Form 2555 correctly so you keep more of what you earn.
Get Help Applying the Physical Presence Test Correctly.
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently. Consult with a qualified tax professional about your specific situation.
Related Resources
- Bona Fide Residence vs. Physical Presence Test: Which Should You Use?
- Foreign Earned Income Exclusion: How to Claim Up to $130,000
- Bona Fide Residence Test: How to Qualify
- Foreign Housing Exclusion: Additional Tax Savings
- Form 2555: How to File for the FEIE
- U.S. Expat Tax Deductions and Credits
- Digital Nomad Taxes: What You Need to Know
- Tax Home Test: What It Means for Expats
- Choosing Between FEIE and Foreign Tax Credit
- Streamlined Filing for Late Returns
