The Internal Revenue Service provided some leeway on foreign income reporting requirements to people who needed to flee Ukraine, China, Belarus, Iraq, Ethiopia and Mali due to war, civil unrest and other conditions.
The IRS issued
The revenue procedure adds Ethiopia, Iraq, Ukraine, Belarus, China and Mali to the list of countries for tax year 2022 for which the minimum time requirements are waived.
"Generally, U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income," said the IRS. "However, if their tax home is in a foreign country and they meet either the bona fide residence test or the physical presence test, they can choose to exclude from their income a limited amount of their foreign earned income ($120,000 for 2022). Both the bona fide residence test and the physical presence test contain minimum time requirements."
However, to get relief, they need to have departed their home countries on or after a certain date and meet other conditions. The document gives the following list of departure dates:
Ethiopia: Jan. 3, 2022
Iraq: Jan. 14, 2022
Ukraine: Feb: 12, 2022
Belarus: Feb. 28, 2022
China: April 11, 2022
Mali: July 29, 2022
For example, someone who left Ethiopia on or after Jan. 3, 2022, will be treated as a qualified individual with respect to the period during which they were either present in, or a bona fide resident of, Ethiopia if they can establish a reasonable expectation that they would have met the requirements of Section 911(d) but for those conditions.
To qualify for relief, they must have established residency, or been physically present, in the foreign country on or before the date the Treasury determines they were required to leave the foreign country. For example, those who were first physically present or established residency in Ethiopia after Jan. 3, 2022, aren't eligible to qualify for the exception provided in Section 911(d)(4) of the Tax Code for 2022.
