My husband worked in a foreign country last year, he spent most of the year (more than 335 day) away from home

Question

Myself and the kids stayed in our home in the US, what are our options in filling taxes and can he get the foreign income exemption?

Answer 1

Generally, if your husband stayed in the foreign country for more than 1/2 the year, and earned income there, he would have to file a tax return for that country.

He & You still have to file a US federal ( & state return ), but he can exclude up to about $82,000 of income earned abroad. There are also allowances for housing expenses, but you'll need to check the IRS website for exact details.

However, if your husband was on an assignment and received his salary from a US source, then it is considered domestic earnings, and no exclusion is permitted.

Answer 2

It's not an exemption, it's an exclusion. There's a BIG difference between the two! He may or may not qualify for it or other special treatments for US citizens working abroad.

Your best bet would be to get a copy of IRS Pub 54 from the IRS website. There are many things you need to be aware of and some of the special tax treatments require a timely return or they're lost forever.