I was stationed in Italy for 400 days. While I was in the deployment, I also received differential pay from my civilian job back home. Can I claim FEIE for my CIV job $?

Forum|Forum|4 years ago
February 24, 2022
1 reply
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I lived in the Italian economy and also met the physical presence test, even deploying to combat zone for 3 months of the year. Thanks.

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DaveF1006

To research this completely, I accessed this form the following IRS link. I looked under the section entitled Source of Earned Income. It states, "The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country".

The question is, did you earn the differential pay for services you earned in Italy for your civilian job, or was this passive income earned? It depends if you actually did work in Italy to earn this income.

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