Digital Nomad
Digital Nomad Focus: Foreign Earned Income Exclusion Waivers for War-Affected Countries
New IRS policy adds several countries to the waiver list, so digital nomads forced to depart war-torn regions may still qualify for the foreign earned income exclusion.
By NomadicTax Research Team • 5-8 min read • March 31, 2026
## Background: Foreign Earned Income Exclusion & Time Tests
U.S. citizens or resident aliens living abroad may exclude foreign earned income (up to $130,000 for 2025) if they meet either:
- The **bona fide residence test**; or
- The **physical presence test**
These require minimum time residing abroad. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
## What Has Changed: Waiver of Time Requirements
In **Revenue Procedure 2026-16** (IRB 2026-13, March 23), the IRS added **Haiti, Ukraine, Democratic Republic of the Congo, South Sudan, Iraq, Lebanon, and Mali** to the list of **waiver countries**. For tax year 2025, time abroad requirements are waived for individuals who had to leave those countries due to war, civil unrest, or similar adverse conditions. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai))
This means that digital nomads or expats impacted by conflict in those nations may still qualify for the foreign earned income exclusion even if they couldn't meet the usual residency thresholds. The maximum exclusion for 2025 remains at **$130,000**. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
## Example Scenarios
- **Alex**, a freelancer based in **Ukraine**, left in mid-2025 due to conflict. Although Alex couldn’t meet the physical presence requirement, he may still claim the exclusion for his foreign income in 2025 due to this waiver.
- **Sam**, who had planned a teaching contract in Lebanon through late 2025 but had to leave early, now qualifies under the waiver even though he couldn’t satisfy the three-year intent required under the bona fide residence test.
## Actionable Steps for Affected Nomads
- Verify if your country of residence is on the waiver list (those listed above).
- Collect documentation: travel records, evacuation notices, evidence of conflict forcing departure.
- Claim the exclusion in your **2025 tax return**, as retroactively applicable.
- Use IRS Form 2555 for the exclusion, and attach a statement explaining the reason for departure (war, unrest).
- If you plan to remain abroad in stable countries, ensure tacking up residency or physical presence time moving forward.
This waiver provides tax relief to many who otherwise would lose the exclusion due to extraordinary circumstances. Expats and digital nomads should review eligibility carefully and document as much as possible to leverage this policy.