2026 tax year
Foreign earned income exclusion calculator
Working abroad, you can exclude the income. But the stacking rule quietly claws some of the benefit back.
A US citizen or resident working abroad who meets the bona fide residence or physical presence test can exclude up to $132,900 of foreign earned income for 2026. The catch is the stacking rule: the excluded income still sets your tax bracket, so your remaining income is taxed at the rate it would face without the exclusion. This shows the real saving.
Wages or self-employment earned abroad. Excludable up to $132,900.
US-source income, investment income, not excludable.
Enter your foreign and US income.
Worked example, $100,000 abroad, $20,000 US income
A single filer earns $100,000 working overseas and has $20,000 of US-source income:
| Figure | Amount |
|---|---|
| Foreign income excluded | $100,000 |
| Federal tax with the exclusion | $858 |
| Federal tax with no exclusion | $17,570 |
| Tax the exclusion saves | $16,712 |
Excluding the $100,000 cuts the federal bill from $17,570 to $858, a $16,712 saving. Notice the remaining $20,000 is not taxed at zero: under stacking, it sits on top of the excluded income for bracket purposes, so it is taxed at the rate it would have faced anyway. The exclusion removes the amount, not the rate.
Questions
Who qualifies for the FEIE?
A US citizen or resident with a tax home abroad who meets either the bona fide residence test (a full calendar year as a genuine resident of a foreign country) or the physical presence test (330 full days abroad in any 12-month period). It excludes earned income, wages and self-employment, not investment income.
What is the stacking rule?
Since 2006, the excluded income is added back to determine your tax bracket, and only its own tax is removed. So your non-excluded income is taxed as if the excluded income were still there, you lose the benefit of the low brackets on it. The exclusion still helps, just less than the headline suggests.
FEIE or the foreign tax credit?
If you pay high foreign income tax, the foreign tax credit often beats the exclusion, it offsets US tax dollar-for-dollar and can be carried forward. The exclusion is usually better in low-tax or no-tax countries. You generally cannot use both on the same income, and switching away from the FEIE locks you out for five years.
Is there a housing exclusion too?
Yes, a separate foreign housing exclusion or deduction covers qualifying housing costs above a base amount, on top of the earned income exclusion. It has its own limits that vary by city. This calculator models the earned income exclusion only; add the housing exclusion on Form 2555 if it applies.
Related tools
- 1099 tax calculator self-employment abroad
- Paycheck calculator US wage tax
- Quarterly tax calculator estimated payments
Estimate for the 2026 tax year, earned income exclusion only. The housing exclusion and foreign tax credit can change the result. Not tax advice.