Bona Fide Residence vs Physical Presence Test — Form 2555

The Bona Fide Residence Test (Form 2555 Part II) is qualitative — you must demonstrate genuine intent to remain in the foreign country indefinitely, permanence of your living situation, and ideally formal tax residency there. The Physical Presence Test (Form 2555 Part III) is purely quantitative: 330+ full days in a foreign country during any 12-month period. PPT is easier to document; Bona Fide may offer more flexibility for taxpayers with occasional US visits.

You pick one test per tax year on Form 2555. Each year is independent — you can use Bona Fide one year and Physical Presence the next if you qualify. Part II covers Bona Fide Residence; Part III covers the Physical Presence Test.

No. The Physical Presence Test allows any 12 consecutive months. You can elect a window spanning two calendar years — useful if you moved abroad mid-year. The 330 days must fall within your chosen 12-month window, and you may only claim FEIE for qualifying days within the tax year at issue.

Bona Fide Residence requires clear intent to remain indefinitely. Uncertain intent typically disqualifies you. The IRS looks at objective evidence: long-term lease, foreign tax registration, absence of a fixed US return date. If intent is genuinely uncertain, the Physical Presence Test (330-day day count) is the safer, more objective fallback. Consult a cross-border CPA when intent is ambiguous.