The United States taxes citizens and residents on their worldwide income.
[3] Taxpayers filing a joint return are entitled to up to two exclusions if both have earned income.
In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum ($56.99 per day in 2025) but with limits.
In addition, the taxpayer must meet either of two tests: The bona fide residence test is not available to a resident alien, unless he/she is a citizen or national of a country with which the United States has an income tax treaty in effect.
Further, the test is not met if the taxpayer declares to the foreign government that they are not a tax resident of that country.
[3] The amount of exclusion that a taxpayer is entitled to is equal to the lesser of foreign earned income for the year or the maximum exclusion, divided by the total number of days (365 or 366) in the year times the number of "qualifying days".