1040-US: Entering U.S. days (bona fide residence test) and travel information (physical presence test) for Form 2555

Alerts and notices

Question

Where do I enter U.S. days during the tax year for clients qualifying under the bona fide residence test, and where do I enter travel information for clients qualifying under the physical presence test?

Answer

Enter all travel information (U.S. or foreign) in the statement attached to the US business days and travel information field. This field is located in the Foreign Earned Income Allocation Information section of Screen 2555.

Information entered in this field's statement is used to:

  • calculate the amount of income earned in the U.S. on business during either qualifying test period.
  • complete lines 14(a)-(d) if qualifying under the bona fide residence test.
  • calculate the 12-month period of physical presence reported on line 16 and complete lines 18 (a)-(f), if qualifying under the physical presence test.

Details on the statement fields

  • Type Code: Code 2 items (travel to restricted country) are not treated as days present in a foreign country or countries when the physical presence period reported on Form 2555 line 16 is calculated
  • Name of Country: "United States" is automatically entered in the Name of Country column when code 1 is selected.
  • Date Arrived, Date Left: Enter in chronological order the dates the taxpayer arrived in and departed from a foreign country, a restricted country, or the U.S. Each date entered must be a full day of physical presence for foreign travel. A full day means the 24-hour period that starts at midnight, (i.e., enter the following day's date if the day of arrival does not qualify as a full day). The number of days in the U.S. and days spent in a restricted country are not included when calculating the physical presence 12-month period.
  • US Bus Days: Enter the number of days worked in the U.S. during the trip. The total number of U.S. business days in Screen 2555 transfers to the Form 2555 Foreign Earned Income Allocation Worksheet as U.S. days worked during foreign assignment. The number of total U.S. business days may be used to allocate income and expense items depending upon the assigned allocation code.
  • US Inc (Force): Use this field to override (force) the calculated U.S. earned income for the dates entered. U.S. income during the assignment is allocated to each code 1 item based on the trip's U.S. business days to total U.S. business days. The total U.S. income earned during the assignment is reported on the Form 2555 Foreign Earned Income Allocation Worksheet. Amounts entered in this field are reported on Form 2555 line 14, if qualifying under the bona fide residence test, or line 18 if the physical presence test is met.

    Note: Enter an amount in this field only if the item's code is 1 or blank.

  • Full Days: The number of full days present in a foreign country (for code 3, Travel to foreign country) is calculated and displayed in this field. The number of days in the foreign country is calculated from travel dates you enter in the Date Arrived and Date Left columns. The number of full days is reported on Form 2555 line 18 if the taxpayer qualifies under the physical presence test.
  • Days (Force): Use this field to override (force) the calculation of full days present in a foreign country displayed in the previous column. You will also need to force the physical presence dates in Part III of this screen.

    Note: Enter information in this field only if the taxpayer qualifies under the physical presence test.

Enter travel information in chronological order to calculate the 12-month physical presence period on line 16. Only one qualifying period calculates. Enter travel information that is most closely related to the current tax year and also contains at least 330 days physically present in a foreign country or countries. Form 2555 is not completed if the application calculates fewer than 330 physical presence days.

When you enter both bona fide residence information and physical presence information, the test with the greater number of qualifying days in the taxable year is used on the Form 2555. To force a specific test, refer to that test's section of Screen 2555.

Related topic: Foreign tax credits and earned income FAQs (1040)