The physical presence test is one of two ways to qualify for the Foreign Earned Income Exclusion on Form 2555 (the other is the bona fide residence test). To meet it, an individual must be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months. This 12-month window does not have to match the calendar year and can straddle two different years.
A full day means 24 consecutive hours, beginning and ending at midnight. Days you spend in the United States, and time on or over international waters while traveling, do not count toward the 330. Furthermore, qualifying requires a separate foreign tax home. A perpetual traveler who meets the day count but maintains a primary abode in the United States will fail the test.
For the 2025 tax year, those who qualify can exclude up to $130,000 of foreign earned income from federal income tax. However, this exclusion applies only to earned income, and it does not reduce self-employment tax obligations. Individuals can review the foreign earned income exclusion details or consider professional help to confirm eligibility.