What is Physical Presence Test?

Definition

The Physical Presence Test is one of two qualifying tests (alongside the Bona Fide Residence Test) that US citizens and resident aliens must pass to claim the Foreign Earned Income Exclusion (FEIE) under IRC Section 911. To satisfy this test, you must be physically present in a foreign country or countries for at least 330 full days during any consecutive 12-month period. The test is purely mechanical — unlike the Bona Fide Residence Test, it does not consider your intent, ties, or residency status. The 330-Day Requirement: You must accumulate at least 330 full days (24-hour periods, midnight to midnight) of physical presence in one or more foreign countries. The days do not need to be consecutive, and you can move between foreign countries without breaking the count. However, any day you spend even partially in the United States — including days of arrival and departure — does not count as a full day in a foreign country. This means you have a maximum of 35 days (in a 365-day period) that you can spend in the US, in transit over international waters, or in airspace not within a foreign country. Choosing the 12-Month Period: The 12-month qualifying period does not have to align with the calendar year. It can begin on any day, and you should strategically choose the start date that allows you to meet the 330-day requirement. For example, if you moved to Canada on March 15, your 12-month period could run from March 15 to March 14 of the following year. You report the chosen qualifying period on Form 2555, Part III. Counting Days Correctly: A 'full day' means a complete 24-hour period beginning at midnight. The day you depart the US does not count as a day in a foreign country (you started the day in the US). The day you arrive back in the US does not count either. Transit days — time spent on a plane flying between countries — do not count as days in a foreign country. Brief layovers in the US (even at an airport) count as US days. However, if your flight passes through US airspace without landing, that does not count as a US day. How It Relates to the FEIE: Passing the Physical Presence Test is one of three requirements for claiming the FEIE (the others are having a tax home in a foreign country and having foreign earned income). For 2026, the FEIE allows you to exclude up to $130,000 of foreign earned income from US taxation. The exclusion is prorated if your qualifying period does not cover the entire tax year — you receive a proportional exclusion based on the number of qualifying days within the tax year. Form 2555 Part III: You document your Physical Presence Test qualification on Part III of Form 2555, listing each trip to the US (or any country other than your primary foreign country of residence) during the 12-month qualifying period. You must provide dates and destinations for every trip. The IRS may request passport stamps, boarding passes, or other documentation to verify your claimed days, so maintaining meticulous travel records is essential. Special Rules: If you must leave a foreign country due to war, civil unrest, or similar adverse conditions, the IRS may waive the 330-day requirement under a 'waiver of time requirements' provision. The IRS publishes a list of qualifying countries and applicable dates each year. Additionally, if you were physically present in a foreign country and had to evacuate, the days you would have spent in that country can still count toward the 330-day requirement. Cross-Border Relevance: For US citizens living in Canada, the Physical Presence Test is particularly relevant for those who travel frequently to the US for business or personal reasons. Canadian residents working remotely for US employers must carefully track US travel days to ensure they maintain FEIE eligibility. Even a few extra days in the US visiting family during the holidays can push you below the 330-day threshold.

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Common Mistakes to Avoid

• 1Counting partial days (arrival/departure days in a foreign country) as full days — only complete midnight-to-midnight days qualify
• 2Not choosing the optimal 12-month qualifying period start date, resulting in a failed test that could have been passed with a different start date
• 3Failing to maintain detailed travel logs with dates and destinations, leaving you unable to substantiate your claim if audited

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