Bona Fide Residence Test
One Full Year of Residence
You are considered a "bona fide resident" of the foreign country if you reside in that country for
"an uninterrupted period that includes an entire tax year." A tax year is January 1 through December 31. The qualifying period for the bona fide residence test must include one full calendar year.
Trips outside the Foreign Country
Brief trips or vacations outside the foreign country will not jeopardize your status as a bona fide resident, as long as the trips are brief and you clearly intended to return to the foreign country. You can even make brief trips to the United States.
Statement to Foreign Authorities
You will not be considered a bona fide resident of a foreign country if you have submitted a statement to the foreign country that you are not a resident of that country, and the foreign government has determined that you are not subject to their tax laws as a resident.
Tax Treaty
Special treatment of income under an income tax treaty will not prevent you from meeting the bona fide residence test.
Physical Presence Test
You are considered physically present in a foreign country (or countries) if you reside in that country (or countries) for at least 330 full days in a 12-month period. You can live and work in any number of foreign countries, but you must be physically present in those countries for at least 330
full days.
Full Day
A "full day" is 24 hours. So, the day you arrive and the day you leave the country are generally not counted towards the physical presence test.
12-Month Period
The qualifying period can be any consecutive 12-month period of time. You do not have to begin your qualifying period with your first day in a foreign country. You can choose a 12-month period that provides the greatest income exclusion. You can count both vacation and business days spent in the foreign country towards meeting the 330 day minimum.
Travel Outside the Foreign Country
Travel outside of the foreign country generally won't jeopardize your 330 full days. The IRS explains it this way, "You can move about from one place to another in a foreign country or to another foreign country without losing full days. If any part of your travel is not within any foreign country and takes less than 24 hours, you are considered to be in a foreign country during that part of travel." (Source: Publication 54, section on the
physical presence test.)
Exceptions to the time requirements
The minimum time requirements for both the bona fide and physical presence tests can be waived. The only valid reason for a waiver is that you are forced to leave the foreign country because of "war, civil unrest, or similar adverse conditions." You should be able to prove that you would have met the time requirements if adverse conditions had not prevented your stay.
Prohibition on Travel to Cuba
Time spent residing or working in Cuba will not qualify for the bona fide residence or physical presence tests.
