Foreign Earned Income Exclusion Relief: Rev. Proc. 2026-16 Countries
If you’re a US citizen or resident who was living abroad and had to evacuate in 2025 because of war or civil unrest, there’s good news. Under foreign earned income exclusion relief provided by IRS Revenue Procedure 2026-16, the IRS will treat you as a qualified individual for section 911 purposes — meaning you can still claim the foreign earned income exclusion and housing cost exclusion/deduction for 2025 even though you couldn’t complete the full 330-day presence test or the bona fide residence test.
This revenue procedure, released in early 2026, lists seven specific countries and the earliest departure dates that qualify. At SW Accounting & Consulting Corp, we work with expats across exactly these hotspots, and we’ve already had clients asking how to claim the waiver on their 2025 returns. Here’s the complete breakdown.
How does the section 911 foreign earned income exclusion normally work? 🌍
Section 911 allows a “qualified individual” with a tax home abroad to exclude foreign earned income (up to the annual cap) and to exclude or deduct the housing cost amount.
To be a qualified individual, your tax home must be in a foreign country and you must meet one of two tests:
- Bona fide residence test — You’re a US citizen who’s a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year.
- Physical presence test — You’re a US citizen or resident who, during any period of 12 consecutive months, is present in a foreign country for at least 330 full days.
Both tests require continuity. A premature departure — even for reasons completely outside your control — normally kills the exclusion. That’s where section 911(d)(4) comes in.
What is the adverse conditions waiver in section 911(d)(4)? 🛡
If the Treasury Secretary determines that war, civil unrest, or similar adverse conditions required people to leave a country, qualified individuals who departed can still claim section 911 for the period they were there.
The waiver is not automatic. You still must establish that but for the adverse conditions, you could reasonably have been expected to meet the bona fide residence or physical presence test. The IRS publishes the qualifying countries and dates in a revenue procedure each year.
In our expat practice, the “but for” test is where claims succeed or fail. Keep documentation showing you were on track: employment contracts, lease or purchase of a foreign residence, tax home evidence, and immigration filings. Treasury doesn’t expect certainty — it expects a reasonable expectation that the test would have been met.
Which countries qualify for foreign earned income exclusion relief in 2025? 🗺
Rev. Proc. 2026-16 lists seven countries. Your departure date must be on or after the specified date to qualify.
| Country | Departure Date On or After |
|---|---|
| Haiti | January 1, 2025 |
| Ukraine | January 1, 2025 |
| Democratic Republic of the Congo | January 28, 2025 |
| South Sudan | March 7, 2025 |
| Iraq | June 11, 2025 |
| Lebanon | June 22, 2025 |
| Mali | October 30, 2025 |
For example: a US citizen who left Haiti on or after January 1, 2025 is treated as a qualified individual for the period during which they were a bona fide resident of, or physically present in, Haiti — provided they can establish a reasonable expectation they would have met the full residency or presence test but for those conditions.
Who does NOT qualify for the 2025 FEIE waiver? ⚠
You must have established residency or been physically present in the foreign country on or before the specified departure-trigger date.
This is a hard cutoff. If you first arrived in the country after the Treasury’s determination date, you are not eligible for the section 911(d)(4) exception for 2025.
The Rev. Proc. says: “individuals who first established residency or were physically present in Haiti after January 1, 2025, are not eligible.” The same logic applies to every listed country. If you moved to Ukraine in February 2025 and left in March, you do not qualify. Your start date must precede the trigger date.
How do I claim the foreign earned income exclusion relief on my 2025 return? 📝
File Form 2555 as you normally would, but at Part III line 14 indicate the adverse-conditions waiver under section 911(d)(4) and cite Rev. Proc. 2026-16.
- Complete Form 2555 with the foreign tax home, qualifying country, and dates of presence.
- On Part III (bona fide residence) or Part IV (physical presence), indicate that your stay was cut short due to adverse conditions under section 911(d)(4).
- Attach a statement citing Rev. Proc. 2026-16 and explaining how you meet the country/date requirements and the “but for” standard.
- If you already filed your 2025 return without claiming the waiver, file Form 1040-X with an amended Form 2555.
If you need help with the mechanics, the IRS foreign earned income exclusion topic at irs.gov has step-by-step instructions, and a qualified CPA can handle amended returns efficiently.
Frequently Asked Questions 🗂
For the full IRS revenue procedure text, see Rev. Proc. 2026-16 and related guidance on the IRS international taxpayers portal. Prior-year waivers are listed in Rev. Proc. 2025-17 and earlier procedures.
Questions on how the FEIE waiver interacts with the foreign tax credit, self-employment tax, or state residency? SW Accounting & Consulting Corp’s international tax team handles these cases daily — reach out for a consultation.
