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IRS Issues Housing Limits Under Foreign Earned Income Exclusion

MAR. 28, 2019

Notice 2019-24; 2019-14 IRB 932

DATED MAR. 28, 2019

DOCUMENT ATTRIBUTES

Institutional Authors
Internal Revenue Service
Code Sections
Section 911
Subject Area/Tax Topics
Exemptions and deductions
Foreign-source income
Housing
Individual income taxation
Jurisdictions
United States
Tax Analysts Document Number
2019-12031
Tax Analysts Electronic Citation
2019 WTD 61-30
2019 TNT 61-34
2019 TPR 13-8

Citations: Notice 2019-24; 2019-14 IRB 932

Superseded by Notice 2020-13
Supersedes Notice 2006-87; Notice 2007-25; Notice 2007-77; Notice 2008-107; Notice 2010-27; Notice 2011–8; Notice 2012–19; Notice 2013–31; Notice 2014-29; Notice 2015-33; Notice 2016-21; Notice 2017-21; Notice 2018-44

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2019

Part III — Administrative, Procedural, and Miscellaneous

SECTION 1. PURPOSE

This notice provides adjustments to the limitation on housing expenses for purposes of section 911 of the Internal Revenue Code for specific locations for 2019. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States.

SECTION 2. BACKGROUND

Section 911(a) allows a qualified individual to elect to exclude from gross income the foreign earned income and housing cost amount of such individual. The term “housing cost amount” is generally the total of the housing expenses for the taxable year minus a base housing amount. See section 911(c)(1). For this purpose, the housing expenses taken into account are limited to an amount that is tied to the maximum foreign earned income exclusion. Specifically, the limit on such housing expenses equals 30 percent (adjusted as may be provided under the Secretary's authority under section 911(c)(2)(B)) of the maximum exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. See sections 911(c)(2)(A) and 911(d)(1). Thus, under this general limitation, a qualified individual whose entire taxable year is within the applicable period is limited to maximum housing expenses of $31,770 ($105,900 x.30) for 2019.

Similarly, the computation of the base housing amount is also tied to the maximum foreign earned income exclusion. Specifically, the base housing amount is 16% of the maximum exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. See sections 911(c)(1)(B) and 911(d)(1). Assuming that the entire taxable year of a qualified individual is within the applicable period, the base housing amount for 2019 is $16,944 ($105,900 x.16). Section 911(c)(2)(B) authorizes the Secretary to issue regulations or other guidance to adjust the percentage under section 911(c)(2)(A)(i) (which determines the limit on housing expenses) based on geographic differences in housing costs relative to housing costs in the United States. Pursuant to this authority, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have published annual notices concerning the limitation on the section 911 housing cost amounts since the 2006 taxable year.

For more background on the foreign housing exclusion, https://www.irs.gov/individuals/international-taxpayers/foreign-housing-exclusion-or-deduction.

SECTION 3. TABLE OF ADJUSTED LIMITATIONS FOR 2019

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $31,770) for 2019.

Country	Location	Limitation on Housing Expenses (full year)	Limitation on Housing Expenses (daily)
Angola	Luanda	84,000	230.14
Argentina	Buenos Aires	56,500	154.79
Australia	Perth	32,300	88.49
Australia	Sydney	61,000	167.12
Austria	Vienna	35,400	96.99
Bahamas, The	Nassau	49,700	136.16
Bahrain	Bahrain	48,300	132.33
Barbados	Barbados	37,700	103.29
Barbados	Bridgetown	37,700	103.29
Belgium	Brussels	41,900	114.79
Belgium	Gosselies	37,300	102.19
Belgium	Mons	37,300	102.19
Belgium	SHAPE/Chievres	37,300	102.19
Bermuda	Bermuda	90,000	246.58
Brazil	Rio de Janeiro	35,100	96.16
Brazil	Sao Paulo	56,600	155.07
Canada	Calgary	38,500	105.48
Canada	Montreal	52,500	143.84
Canada	Ottawa	43,600	119.45
Canada	Quebec	34,900	95.62
Canada	Toronto	50,200	137.53
Canada	Vancouver	43,700	119.73
Canada	Victoria	39,500	108.22
Cayman Islands	Grand Cayman	48,000	131.51
Chile	Santiago	39,100	107.12
China	Beijing	71,200	195.07
China	Hong Kong	114,300	313.15
China	Shanghai	57,001	156.17
Colombia	Bogota	58,700	160.82
Colombia	All cities other than Bogota	49,400	135.34
Costa Rica	San Jose	32,000	87.67
Democratic Republic of the Congo	Kinshasa	42,000	115.07
Denmark	Copenhagen	43,704	119.74
Dominican Republic	Santo Domingo	45,500	124.66
Ecuador	Quito	38,200	104.66
El Salvador	San Salvador	32,000	87.67
Estonia	Tallinn	46,600	127.67
France	Garches	71,800	196.71
France	Lyon	39,700	108.77
France	Marseille	38,700	106.03
France	Montpellier	32,000	87.67
France	Paris	71,800	196.71
France	Sevres	71,800	196.71
France	Suresnes	71,800	196.71
France	Versailles	71,800	196.71
France	All cities other than Garches, Le Havre, Lyon, Marseille, Montpellier, Paris, Sevres, Suresnes, and Versailles	31,900	87.40
Germany	Babenhausen	35,200	96.44
Germany	Baumholder	35,000	95.89
Germany	Berlin	43,000	117.81
Germany	Birkenfeld	35,000	95.89
Germany	Boeblingen	42,300	115.89
Germany	Bonn	42,000	115.07
Germany	Cologne	56,200	153.97
Germany	Darmstadt	35,200	96.44
Germany	Frankfurt am Main	36,800	100.82
Germany	Garmisch-Partenkirchen	33,100	90.68
Germany	Gelnhausen	44,400	121.64
Germany	Giessen	36,000	98.63
Germany	Grafenwoehr	35,600	97.53
Germany	Hanau	44,400	121.64
Germany	Heidelberg	32,900	90.14
Germany	Idar-Oberstein	35,000	95.89
Germany	Ingolstadt	50,300	137.81
Germany	Kaiserslautern, Landkreis	43,200	118.36
Germany	Karlsruhe	34,000	93.15
Germany	Koblenz	34,600	94.79
Germany	Leimen	32,900	90.14
Germany	Ludwigsburg	42,300	115.89
Germany	Mainz	48,100	131.78
Germany	Mannheim	32,900	90.14
Germany	Munich	50,300	137.81
Germany	Nellingen	42,300	115.89
Germany	Neubruecke	35,000	95.89
Germany	Ober Ramstadt	35,200	96.44
Germany	Oberammergau	33,100	90.68
Germany	Pfullendorf	34,600	94.79
Germany	Pirmasens	43,200	118.36
Germany	Rheinau	32,900	90.14
Germany	Schwetzingen	32,900	90.14
Germany	Seckenheim	32,900	90.14
Germany	Sembach	43,200	118.36
Germany	Stuttgart	42,300	115.89
Germany	Vilseck	35,600	97.53
Germany	Wahn	42,000	115.07
Germany	Wiesbaden	48,100	131.78
Germany	Zweibrueken	43,200	118.36
Germany	All cities other than Augsburg, Babenhausen, Bad Aibling, Bad Kreuznach, Bad Nauheim, Baumholder, Berchtesgaden, Berlin, Birkenfeld, Boeblingen, Bonn, Bremen, Bremerhaven, Butzbach, Cologne, Darmstadt, Delmenhorst, Duesseldorf, Erlangen, Flensburg, Frankfurt am Main, Friedberg, Fuerth, Garlstedt, Garmisch-Partenkirchen, Geilenkirchen, Gelnhausen, Germersheim, Giebelstadt, Grafenwoehr, Grefrath, Greven, Gruenstadt, Hamburg, Hanau, Handorf, Hannover, Heidelberg, Heilbronn, Herongen, Idar-Oberstein, Ingolstadt, Kaiserslautern, Landkreis, Kalkar, Karlsruhe, Kerpen, Kitzingen, Koblenz, Leimen, Leipzig, Ludwigsburg, Mainz, Mannheim, Mayen, Moenchen-Gladbach, Muenster, Munich, Nellingen, Neubruecke, Noervenich, Nuernberg, Ober Ramstadt, Oberammergau, Osterholz-Scharmbeck, Pfullendorf, Pirmasens, Rheinau, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf and Zweibrueken	34,600	94.79
Ghana	Accra	36,000	98.63
Greece	Athens	35,200	96.44
Greece	Elefsis	35,200	96.44
Greece	Ellinikon	35,200	96.44
Greece	Mt. Parnis	35,200	96.44
Greece	Mt. Pateras	35,200	96.44
Greece	Nea Makri	35,200	96.44
Greece	Piraeus	35,200	96.44
Greece	Tanagra	35,200	96.44
Guatemala	Guatemala City	42,000	115.07
Guinea	Conakry	51,300	140.55
Guyana	Georgetown	35,000	95.89
Holy See, The	Holy See, The	47,900	131.23
Hungary	Budapest	32,500	89.04
India	Mumbai	67,920	186.08
India	New Delhi	56,124	153.76
Indonesia	Jakarta	37,776	103.50
Ireland	Dublin	41,600	113.97
Ireland	Shannon Area	32,900	90.14
Israel	Beer Sheva	54,100	148.22
Israel	Tel Aviv	50,800	139.18
Italy	Genoa	41,800	114.52
Italy	La Spezia	40,400	110.68
Italy	Milan	71,500	195.89
Italy	Naples	49,100	134.52
Italy	Parma	36,300	99.45
Italy	Pordenone-Aviano	38,100	104.38
Italy	Rome	47,900	131.23
Italy	Turin	35,800	98.08
Italy	Vicenza	39,900	109.32
Jamaica	Kingston	41,200	112.88
Japan	Atsugi	41,600	113.97
Japan	Camp Zama	41,600	113.97
Japan	Chiba-Ken	41,600	113.97
Japan	Fussa	41,600	113.97
Japan	Gifu	74,300	203.56
Japan	Haneda	41,600	113.97
Japan	Iwakuni	32,800	89.86
Japan	Kanagawa-Ken	41,600	113.97
Japan	Komaki	74,300	203.56
Japan	Machidi-Shi	41,600	113.97
Japan	Misawa	33,200	90.96
Japan	Nagoya	74,300	203.56
Japan	Okinawa Prefecture	58,600	160.55
Japan	Osaka-Kobe	90,664	248.39
Japan	Sagamihara	41,600	113.97
Japan	Saitama-Ken	41,600	113.97
Japan	Sasebo	34,700	95.07
Japan	Tachikawa	41,600	113.97
Japan	Tokyo	93,200	255.34
Japan	Tokyo-to	41,600	113.97
Japan	Yokohama	49,600	135.89
Japan	Yokosuka	50,200	137.53
Japan	Yokota	39,200	107.40
Jerusalem	Jerusalem	49,000	134.25
Jerusalem	West Bank	49,000	134.25
Kazakhstan	Almaty	48,000	131.51
Korea	Camp Colbern	54,200	148.49
Korea	Camp Market	57,600	157.81
Korea	Camp Mercer	54,200	148.49
Korea	K-16	57,600	157.81
Korea	Kimpo Airfield	57,600	157.81
Korea	Munsan	32,900	90.14
Korea	Osan AB	37,100	101.64
Korea	Pyongtaek	41,000	112.33
Korea	Seoul	57,600	157.81
Korea	Suwon	57,600	157.81
Korea	Taegu	34,900	95.62
Korea	Tongduchon	35,200	96.44
Korea	Uijongbu	31,800	87.12
Kuwait	Kuwait City	64,400	176.44
Kuwait	All cities other than Kuwait City	57,700	158.08
Luxembourg	Luxembourg	39,200	107.40
Macedonia	Skopje	35,400	96.99
Malaysia	Kuala Lumpur	46,200	126.58
Malaysia	All cities other than Kuala Lumpur	33,700	92.33
Malta	Malta	55,100	150.96
Mexico	Merida	37,900	103.84
Mexico	Mexico City	47,900	131.23
Mexico	Monterrey	33,200	90.96
Mexico	All cities other than Ciudad Juarez, Cuernavaca, Guadalajara, Hermosillo, Matamoros, Mazatlan, Merida, Metapa, Mexico City, Monterrey, Nogales, Nuevo Laredo, Reynosa, Tapachula, Tijuana, Tuxtla Gutierrez, and Veracruz	39,400	107.95
Mozambique	Maputo	39,500	108.22
Namibia	Windhoek	32,100	87.95
Netherlands	Amsterdam	52,900	144.93
Netherlands	Aruba	36,000	98.63
Netherlands	Brunssum	35,100	96.16
Netherlands	Eygelshoven	35,100	96.16
Netherlands	Hague, The	57,000	156.16
Netherlands	Heerlen	35,100	96.16
Netherlands	Hoensbroek	35,100	96.16
Netherlands	Hulsberg	35,100	96.16
Netherlands	Kerkrade	35,100	96.16
Netherlands	Landgraaf	35,100	96.16
Netherlands	Maastricht	35,100	96.16
Netherlands	Papendrecht	34,400	94.25
Netherlands	Rotterdam	34,400	94.25
Netherlands	Schaesburg	35,100	96.16
Netherlands	Schinnen	35,100	96.16
Netherlands	Schiphol	52,900	144.93
Netherlands	Ypenburg	57,000	156.16
Netherlands	All cities other than Amsterdam, Aruba, Brunssum, Coevorden, Eygelshoven, The Hague, Heerlen, Hoensbroek, Hulsberg, Kerkrade, Landgraaf, Maastricht, Margraten, Papendrecht, Rotterdam, Schaesburg, Schinnen, Schiphol, and Ypenburg.	33,900	92.88
Netherlands Antilles	Curacao	45,800	125.48
New Zealand	Auckland	35,700	97.81
New Zealand	Christchurch	32,100	87.95
New Zealand	Wellington	33,800	92.60
Nicaragua	Managua	31,800	87.12
Nigeria	Abuja	36,000	98.63
Norway	Oslo	35,200	96.44
Oman	Muscat	41,300	113.15
Panama	Panama City	39,500	108.22
Peru	Lima	39,100	107.12
Philippines	Cavite	32,400	88.77
Philippines	Manila	37,380	102.41
Portugal	Alverca	43,800	120.00
Portugal	Lisbon	43,800	120.00
Qatar	Doha	45,888	125.72
Qatar	All cities other than Doha	32,400	88.77
Romania	Bucharest	41,200	112.88
Russia	Moscow	108,000	295.89
Russia	Saint Petersburg	60,000	164.38
Russia	Sakhalin Island	77,500	212.33
Russia	Vladivostok	77,500	212.33
Russia	Yekaterinburg	47,400	129.86
Saudi Arabia	Riyadh	40,000	109.59
Singapore	Singapore	82,900	227.12
Slovenia	Ljubljana	50,200	137.53
South Africa	Pretoria	39,300	107.67
Spain	Barcelona	40,600	111.23
Spain	Madrid	58,300	159.73
Spain	Rota	35,600	97.53
Spain	Valencia	33,500	91.78
Suriname	Paramaribo	33,000	90.41
Switzerland	Bern	66,200	181.37
Switzerland	Geneva	94,300	258.36
Switzerland	Zurich	39,219	107.45
Switzerland	All cities other than Bern, Geneva, and Zurich	32,900	90.14
Taiwan	Taipei	46,188	126.54
Tanzania	Dar Es Salaam	44,000	120.55
Thailand	Bangkok	59,000	161.64
Trinidad and Tobago	Port of Spain	54,500	149.32
Ukraine	Kiev	72,000	197.26
United Arab Emirates	Abu Dhabi	49,687	136.13
United Arab Emirates	Dubai	57,174	156.64
United Kingdom	Basingstoke	41,099	112.60
United Kingdom	Bath	41,000	112.33
United Kingdom	Bracknell	62,100	170.14
United Kingdom	Brookwood	35,500	97.26
United Kingdom	Cambridge	34,400	94.25
United Kingdom	Caversham	73,800	202.19
United Kingdom	Cheltenham	41,900	114.79
United Kingdom	Croughton	36,200	99.18
United Kingdom	Fairford	34,200	93.70
United Kingdom	Farnborough	54,700	149.86
United Kingdom	Felixstowe	33,200	90.96
United Kingdom	Gibraltar	44,616	122.24
United Kingdom	Harrogate	37,400	102.47
United Kingdom	High Wycombe	62,100	170.14
United Kingdom	Huntingdon	35,500	97.26
United Kingdom	Kemble	34,200	93.70
United Kingdom	Lakenheath	45,600	124.93
United Kingdom	London	69,200	189.59
United Kingdom	Loudwater	54,600	149.59
United Kingdom	Menwith Hill	37,400	102.47
United Kingdom	Mildenhall	45,600	124.93
United Kingdom	Oxfordshire	34,800	95.34
United Kingdom	Plymouth	34,800	95.34
United Kingdom	Portsmouth	34,800	95.34
United Kingdom	Reading	62,100	170.14
United Kingdom	Rochester	35,700	97.81
United Kingdom	Samlesbury	35,500	97.26
United Kingdom	Southampton	44,200	121.10
United Kingdom	Surrey	48,402	132.61
United Kingdom	Waterbeach	35,500	97.26
United Kingdom	Wiltshire	33,500	91.78
United Kingdom	All cities other than Basingstoke, Bath, Belfast, Birmingham, Bracknell, Bristol, Brookwood, Brough, Cambridge, Caversham, Chelmsford, Cheltenham, Chicksands, Croughton, Dunstable, Edinburgh, Edzell, Fairford, Farnborough, Felixstowe, Ft. Halstead, Gibraltar, Glenrothes, Greenham Common, Harrogate, High Wycombe, Huntingdon, Hythe, Kemble, Lakenheath, Liverpool, London, Loudwater, Menwith Hill, Mildenhall, Nottingham, Oxfordshire, Plymouth, Portsmouth, Reading, Rochester, Samlesbury, Southampton, Surrey, Waterbeach, Welford, West Byfleet, and Wiltshire.	35,500	97.26
Venezuela	Caracas	57,000	156.16
Vietnam	Hanoi	46,800	128.22
Vietnam	Ho Chi Minh City	42,000	115.07

SECTION 4. OPTION TO APPLY 2019 ADJUSTED LIMITATIONS TO 2018 TAXABLE YEAR

For some locations, the limitation on housing expenses provided in Section 3 of this notice may be higher than the limitation on housing expenses provided in the “Table of Adjusted Limitations for 2018” in Notice 2018-44. A qualified individual incurring housing expenses in such a location during 2018 may apply the adjusted limitation on housing expenses provided in Section 3 of this notice for 2019 in lieu of the amounts provided in the "Table of Adjusted Limitations for 2018" in Notice 2018-44 (and as set forth in the Instructions to Form 2555, Foreign Earned Income, for 2018).

The Treasury Department and the IRS anticipate that future annual notices providing adjustments to housing expense limitations will make a similar option available to qualified individuals that incur housing expenses in the immediately preceding year. For example, when adjusted housing expense limitations for 2020 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2019 taxable year.

SECTION 5. Filing Prior Year or Amended Tax Returns

Notice 2011–8, 2011-8 I.R.B. 503; Notice 2012–19, 2012-10 I.R.B. 440; Notice 2013–31, 2013-21 I.R.B. 1099; Notice 2014-29, 2014-18 I.R.B. 991; Notice 2015-33, 2015-18 I.R.B. 934; Notice 2016-21, 2016-12 I.R.B. 465; Notice 2017-21, 2017-13 I.R.B. 1026; and Notice 2018-44, 2018-21 I.R.B. 611 are relisted to assist those individuals who are filing prior year or amended tax returns.

SECTION 6. EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2006-87, 2006-43 I.R.B. 766; Notice 2007-25, 2007-12 I.R.B. 760; Notice 2007-77, 2007-40 I.R.B. 735; Notice 2008-107, 2008-50 I.R.B. 1265; Notice 2010-27, 2010-15 I.R.B. 531; Notice 2011–8, 2011-8 I.R.B. 503; Notice 2012–19, 2012-10 I.R.B. 440; Notice 2013–31, 2013-21 I.R.B. 1099; Notice 2014-29, 2014-18 I.R.B. 991; Notice 2015-33, 2015-18 I.R.B. 934; Notice 2016-21, 2016-12 I.R.B. 465; Notice 2017-21, 2017-13 I.R.B. 1026, and Notice 2018-44, 2018-21 I.R.B. 611.

SECTION 7. EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2019. However, as provided in Section 4, a taxpayer may apply the 2019 adjusted housing limitations contained in Section 3 of this notice to his or her taxable year beginning in 2018.

SECTION 8. DRAFTING INFORMATION

The principal author of this notice is Kate Y. Hwa of the Office of Associate Chief Counsel (International). For further information regarding this notice contact Kate Y. Hwa at (202) 317-5001 (not a toll-free call).

DOCUMENT ATTRIBUTES

Institutional Authors
Internal Revenue Service
Code Sections
Section 911
Subject Area/Tax Topics
Exemptions and deductions
Foreign-source income
Housing
Individual income taxation
Jurisdictions
United States
Tax Analysts Document Number
2019-12031
Tax Analysts Electronic Citation
2019 WTD 61-30
2019 TNT 61-34
2019 TPR 13-8

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