Physical Presence Test vs. Bona Fide Residence

Do you wish to know the difference between the physical presence test vs. the bona fide test? Are you a person who resides or works outside the United States? You must have all the details related to the bona fide test vs. the physical presence test. Don’t worry at all, as you have come to the best place at where you have to stay tuned to get every single detail related to FEIE. 

Citizens of the United States who stay and work outside the country can exclude part or all of their self-employment and foreign-earned wages income from the federal income tax through a process named FEIE or Foreign Earned Income Exclusion.

Also, to become eligible for the Foreign earned income exclusion, an individual must reside or work outside the United States of America and finish the Physical Presence (PP) or Bona Fide Residence test to prove eligibility threshold.

Key Takeaways

  • To meet the needs for the PPT (Physical Presence Test), you should be present physically in a foreign nation for a minimum of 330 complete days during an annual year. The days don’t have to be consecutive.
  • The BFRT (Bona Fide Residence Test) is used if you think you are a country’s resident or bona fide resident of a foreign country for an uninterrupted time that includes a complete financial year.

Bona Fide Residence Test

The BDRT (Bona Fide Residence Test) is used if you are countries resident for an uninterrupted duration in the complete financial year or a bona fide resident of a foreign country. You may use the BFRD (Bona Fide Residence Test) to become eligible for the FHD (Foreign housing deductions) and FEIE only if you are a US resident alien or citizen of the United States.

Your residence is not always the same as your domicile. To become eligible as a BFR (Bona fide resident) of a foreign nation, you should have established a residence in that country. Your domicile is your permanent house- a place you always intend to return to or return to.

You may look at a BFRT (Bona fide residence test) depending on the purpose or intention of your holiday and the length and nature of your stay outside the USA.

Under the BFRT (Bona Fide Residence Test), income taxpayers may leave the nation for a brief holiday back to the United States or elsewhere for trips. Also, you should have clarity about returning from such holidays to your foreign stay.

Physical Presence Test

If you are present physically in a foreign nation or country for complete 330 days during 12 consecutive months, you might then meet the PPT. There is no need for 330 days to be consecutive; it implies only to United States permanent residents and citizens of the United States.

One of the major differences between the bona fide residence test vs. the physical presence test is that the PPT depends on how long individual life in a foreign nation and is not at all dependent on the type of residence set up, the nature of the stay overseas or even the intentions of returning to the United States.

Also, the complete 330 days for the PPT are counted for any reason for staying overseas; it does not mean that it is for employment purposes. Also, you don’t have to meet the test if illness, a holiday, family issues, or your employer’s orders lead you to be present for less than the needed amount of time. You may even be on a trip.

Exceptions to Both Tests

Both these tests have a time need for you to become eligible, whether you are searching for the physical presence test (PPT) or bona fide resident. Also, the least requirement may be waived if you should leave a foreign nation due to adverse conditions, war, or civil unrest as long as you will show that you are meeting the test because of these conditions. You should have your income tax home in the foreign nation and be physically present or must be a bona fide resident before the starting date of the waiver or in the foreign nation.

Also, if you stay in a foreign nation in violation of US regulations, you should not be treated as physically present in a foreign nation or as a bona fide resident while you are in violation of the regulations. Income in these nations will not become eligible as foreign earned income exclusion, and your housing costs overseas may not be included in your foreign housing amount.

Do you have any questions about which test you must use? accountants understand the specifics and will aid you in choosing the best test for your case that includes physical presence test vs. bona fide residence test. Our USTAX filing experts are highly educated and have rich years of experience to help you in the best possible way. Our ex-pats know your issues related to PPT vs. BFRT. So, they will sit and explain to you all the details. Our talented and dedicated team of experts at USTAXFiling has all the current updates related to both tests. So, schedule your call with us at to get more updates related to income tax filing.

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