Digital Nomad
Digital Nomads & Foreign Earned Income Exclusion: What the 2025-Waiver Expansion Means
The IRS expanded waiver countries for FEIE minimum time tests in 2025; digital nomads in affected countries can claim foreign earned income exclusion if they meet the new rules.
By NomadicTax Research Team • 5-8 min read • November 17, 2025
## Background: Foreign Earned Income Exclusion (FEIE)
Under Section 911 of the Internal Revenue Code, U.S. citizens and resident aliens living abroad may exclude a portion of their foreign earned income if they satisfy either the **bona fide residence test** or the **physical presence test**. There are minimum time-based requirements dictated by IRS rules. ([irs.gov](https://www.irs.gov/irb/2025-03_IRB?utm_source=openai))
## What’s New for Tax Year 2024 through 2025
Revenue Procedure 2025-17 provides a **waiver under Section 911(d)(4)** for individuals who must leave a foreign country because of war, civil unrest, or similar adverse conditions. Countries **added** to the waiver list for tax year 2024 include **Ukraine, Iraq, Haiti,** and **Bangladesh**. ([irs.gov](https://www.irs.gov/irb/2025-13_IRB?utm_source=openai))
This means digital nomads who were in one of these countries and had to depart under unsafe conditions may still satisfy the time-tests for FEIE despite missing the standard days. For tax year 2025, similar waivers or extensions may be granted depending on conditions and IRS guidance.
## Who Benefits & Key Implications
- **Affected individuals**: Nomads, remote workers, expats who were displaced from these countries. They might now qualify even if they didn’t spend the usual days abroad.
- **Eligibility restored**: Foreign earned income exclusion still applies, which allows up to $126,500 (for 2024) of earned income excluded, assuming other tests met. ([irs.gov](https://www.irs.gov/irb/2025-13_IRB?utm_source=openai))
- **Tax return claims**: Must properly claim the waiver and document the adverse condition and the dates of loss of minimum presence.
## Action Steps for Digital Nomads
- **Document disruptions**: Keep records like government travel warnings, personal travel logs, and proof of evacuation or forced departure.
- **Maintain residence ties**: For those claiming bona fide residence, show intent to return or home base abroad. For physical presence, track days in other foreign countries carefully.
- **Consult IRS waivers**: Check the full list under Revenue Procedure 2025-17 for applicable years, and see whether FEIE has been updated in 2025.
## Example Case
* Ana lived in Ukraine when conflict escalated in early 2024. She fled to Poland mid-year. Ordinarily she would fall short of the physical presence test. Under the waiver, she can count the days she was present enough beforehand plus up to her departure, assuming all conditions met, to exclude FEI on her 2024 return.
* Carlos is in Haiti for part of 2024 and left late in the year due to civil unrest. He documents travel warnings, evacuation dates, and homes abroad to claim the waiver for tax filing.
## Checklist for Digital Nomads
- [ ] Confirm whether your country of temporary residence was added to the waiver list.
- [ ] Document departure and adverse conditions carefully.
- [ ] Maintain logs of days abroad in other countries if needed.
- [ ] File Form 2555 or 2555-EZ correctly and include statement of waiver when required.
- [ ] Keep both digital and physical copies of travel documents and proof.
These changes help restore benefit for those affected by global disruptions, ensuring FEIE remains accessible even under extraordinary situations.