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My question is regarding foreign tax exemption form 673. I am curious how qualification is met if all money earned is earned overseas but the candidate only lived in a foreign residence 320days instea

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February 6, 2020
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Best answer by LeonardS

An employee gives Form 637 to their U.S. employer to claim an exemption from U.S. income tax withholding on wages earned abroad. The employer is not part of the qualifying process. They are only following the employee's request not to withhold taxes on the employe's wages.

When the employee gives Form 637 to their employer they are anticipating that they will meet either the physical presence test or bonified presence residence test to qualify for the Foreign Earned Income Exclusion FEIE. It is up to the employee to meet the requirements to claim the FEIE.

Based on the information in your question the employee would not qualify for the FEIE as they only had 320 qualifying days. Therefore, all of the employee's wages would subject to income tax.

LeonardSAnswer

An employee gives Form 637 to their U.S. employer to claim an exemption from U.S. income tax withholding on wages earned abroad. The employer is not part of the qualifying process. They are only following the employee's request not to withhold taxes on the employe's wages.

When the employee gives Form 637 to their employer they are anticipating that they will meet either the physical presence test or bonified presence residence test to qualify for the Foreign Earned Income Exclusion FEIE. It is up to the employee to meet the requirements to claim the FEIE.

Based on the information in your question the employee would not qualify for the FEIE as they only had 320 qualifying days. Therefore, all of the employee's wages would subject to income tax.

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42d_XSAuthor

LeonardS,

So I found out, the 673 doesn't work on a fixed tax year. It works within a years time depending upon when you leave the country. So, the 330day requirement is from the start of work overseas. So, it makes sense that if you left the country in December, there's no way you could meet that 330 days in that tax year.

C

CMR2021

Can you refuse to sign a form 673 form. I want me employer you take taxes out because as a contractor you never know when you could be sent home and not make the amount of days required to earn the exemption. Been down that road and was a huge tax bill at the end of the year