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IRS Issues Housing Limits Under Foreign Earned Income Exclusion

MAR. 7, 2022

Notice 2022-10; 2022-10 IRB 815

DATED MAR. 7, 2022
DOCUMENT ATTRIBUTES
Citations: Notice 2022-10; 2022-10 IRB 815

Superseded by Notice 2023-26

Supersedes Notice 2021-18

Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2022

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 2022. These adjustments are based on geographic differences in housing costs relative to housing costs in the United States.

SECTION 2. BACKGROUND

Section 911 allows a qualified individual to elect to exclude from gross income the foreign earned income and to exclude or deduct the 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 § 911(c)(1). For this purpose, the base housing amount for the taxable year is limited to an amount that is tied to the maximum foreign earned income exclusion amount, which is $112,000 for 2022. See § 911(c)(1)(B) and (d)(1). Specifically, the base housing amount is 16 percent of the maximum foreign earned income exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period that fall within the taxable year. Assuming that the entire taxable year of a qualified individual is within the applicable period, the base housing amount for 2022 is $17,920 ($112,000 x .16).

Similarly, the housing expense amount is also limited, based on a percentage of the maximum foreign earned income exclusion amount. Specifically, the limit on such housing expenses generally equals 30 percent of the maximum foreign earned income exclusion amount (computed on a daily basis), multiplied by the number of days in the applicable period for which the taxpayer is a qualified individual. See § 911(c)(2)(A) and (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 $33,600 ($112,000 x .30) for 2022. However, 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, see https://www.irs. gov/individuals/international-taxpayers/foreign-housing-exclusion-or-deduction.

SECTION 3. TABLE OF ADJUSTED HOUSING LIMITATIONS FOR 2022

The following table provides adjusted limitations on housing expenses (in lieu of the otherwise applicable limitation of $33,600) for 2022.

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

Canberra

36,800

100.82

Australia

Sydney

70,800

193.97

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

41,400

113.42

Belgium

Gosselies

36,900

101.10

Belgium

Mons

36,900

101.10

Belgium

SHAPE/Chievres

36,900

101.10

Bermuda

Bermuda

90,000

246.58

Brazil

Rio de Janeiro

35,100

96.16

Brazil

Sao Paulo

56,600

155.07

Canada

Calgary

40,800

111.78

Canada

Montreal

55,500

152.05

Canada

Ottawa

47,000

128.77

Canada

Quebec

36,000

98.63

Canada

Toronto

63,200

173.15

Canada

Vancouver

49,700

136.16

Canada

Victoria

41,100

112.60

Cayman Islands

Grand Cayman

48,000

131.51

China

Beijing

76,400

209.32

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

37,800

103.56

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

Estonia

Tallinn

46,600

127.67

France

Garches

71,000

194.52

France

Lyon

39,300

107.67

France

Marseille

38,300

104.93

France

Paris

71,000

194.52

France

Sevres

71,000

194.52

France

Suresnes

71,000

194.52

France

Versailles

71,000

194.52

Germany

Babenhausen

34,800

95.34

Germany

Baumholder

34,600

94.79

Germany

Berlin

42,500

116.44

Germany

Birkenfeld

34,600

94.79

Germany

Boeblingen

42,300

115.89

Germany

Bonn

42,000

115.07

Germany

Cologne

56,200

153.97

Germany

Darmstadt

34,800

95.34

Germany

Dulmen

34,200

93.70

Germany

Frankfurt am Main

36,300

99.45

Germany

Gelnhausen

43,900

120.27

Germany

Giessen

36,000

98.63

Germany

Grafenwoehr

35,200

96.44

Germany

Hanau

47,200

129.32

Germany

Idar-Oberstein

34,600

94.79

Germany

Ingolstadt

49,700

136.16

Germany

Kaiserslautern, Landkreis

43,700

119.73

Germany

Koblenz

34,200

93.70

Germany

Ludwigsburg

42,300

115.89

Germany

Mainz

48,700

133.42

Germany

Munich

49,700

136.16

Germany

Nellingen

42,300

115.89

Germany

Neubruecke

34,600

94.79

Germany

Ober Ramstadt

34,800

95.34

Germany

Pfullendorf

34,200

93.70

Germany

Pirmasens

43,700

119.73

Germany

Sembach

43,700

119.73

Germany

Stuttgart

42,300

115.89

Germany

Vilseck

35,200

96.44

Germany

Wahn

42,000

115.07

Germany

Wiesbaden

48,700

133.42

Germany

Zweibrueken

43,700

119.73

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, Dulmen, Erlangen, Flensburg, Frankfurt am Main, Friedberg, Fuerth, Garlstedt, Garmisch-Partenkirchen, Geilenkirchen, Gelnhausen, Germersheim, Giebelstadt, Giessen, Grafenwoehr, Grefrath, Greven, Gruenstadt, Hamburg, Hanau, Handorf, Hannover, Heidelberg, Heilbronn, Herongen, Idar-Oberstein, Ingolstadt, Kaiserslautern, Landkreis, Leimen, Kalkar, Karlsruhe, Kerpen, Kitzingen, Koblenz, Leipzig, Ludwigsburg, Mainz, Mannheim, Mayen, Moenchen-Gladbach, Muenster, Munich, Nellingen, Neubruecke,

 

 

Nuernberg, Noervenich,

34,200

93.70

 

 

Nuernberg, Ober Ramstadt, Oberammergau, Osterholz-Scharmbeck, Pfullendorf, Pirmasens, Rheinberg, Schwabach, Schwetzingen, Seckenheim, Sembach, Stuttgart, Twisteden, Vilseck, Wahn, Wertheim, Wiesbaden, Worms, Wuerzburg, Zirndorf, and

 

 

Zweibrueken

 

 

 

Ghana

Accra

36,000

98.63

Greece

Athens

34,800

95.34

Greece

Elefsis

34,800

95.34

Greece

Ellinikon

34,800

95.34

Greece

Mt. Parnis

34,800

95.34

Greece

Mt. Pateras

34,800

95.34

Greece

Nea Makri

34,800

95.34

Greece

Piraeus

34,800

95.34

Greece

Tanagra

34,800

95.34

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

47,300

129.59

India

Mumbai

67,920

186.08

India

New Delhi

56,124

153.76

Indonesia

Jakarta

37,776

103.50

Ireland

Dublin

41,100

112.60

Israel

Beer Sheva

63,800

174.79

Israel

Jerusalem

49,000

134.25

Israel

Tel Aviv

50,800

139.18

Israel

West Bank

49,000

134.25

Italy

Aviano

37,700

103.29

Italy

Genoa

41,800

114.52

Italy

La Spezia

40,400

110.68

Italy

Milan

70,600

193.42

Italy

Naples

48,500

132.88

Italy

Parma

35,900

98.36

Italy

Rome

47,300

129.59

Italy

Turin

35,400

96.99

Italy

Vicenza

39,500

108.22

Jamaica

Kingston

41,200

112.88

Japan

Atsugi

40,100

109.86

Japan

Camp Zama

40,100

109.86

Japan

Chiba-Ken

40,100

109.86

Japan

Fussa

40,100

109.86

Japan

Gifu

74,300

203.56

Japan

Haneda

40,100

109.86

Japan

Kanagawa-Ken

40,100

109.86

Japan

Komaki

74,300

203.56

Japan

Machidi-Shi

40,100

109.86

Japan

Nagoya

74,300

203.56

Japan

Okinawa Prefecture

56,700

155.34

Japan

Osaka-Kobe

90,664

248.39

Japan

Sagamihara

40,100

109.86

Japan

Saitama-Ken

40,100

109.86

Japan

Tachikawa

40,100

109.86

Japan

Tokyo

92,400

253.15

Japan

Tokyo-to

40,100

109.86

Japan

Yokohama

49,300

135.07

Japan

Yokosuka

53,100

145.48

Japan

Yokota

37,700

103.29

Kazakhstan

Almaty

48,000

131.51

Korea

Camp Colbern

54,200

148.49

Korea

Camp Market

54,500

149.32

Korea

Camp Mercer

54,200

148.49

Korea

K-16

54,500

149.32

Korea

Kimpo Airfield

54,500

149.32

Korea

Osan AB

36,300

99.45

Korea

Pyongtaek

39,000

106.85

Korea

Seoul

54,500

149.32

Korea

Suwon

54,500

149.32

Korea

Tongduchon

35,200

96.44

Kuwait

Kuwait City

64,400

176.44

Kuwait

All cities other than Kuwait City

57,700

158.08

Luxembourg

Luxembourg

38,700

106.03

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

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

Netherlands

Amsterdam

52,900

144.93

Netherlands

Aruba

39,100

107.12

Netherlands

Brunssum

35,400

96.99

Netherlands

Eygelshoven

35,400

96.99

Netherlands

Hague, The

56,400

154.52

Netherlands

Heerlen

35,400

96.99

Netherlands

Hoensbroek

35,400

96.99

Netherlands

Hulsberg

35,400

96.99

Netherlands

Kerkrade

35,400

96.99

Netherlands

Landgraaf

35,400

96.99

Netherlands

Maastricht

35,400

96.99

Netherlands

Papendrecht

34,000

93.15

Netherlands

Rotterdam

34,000

93.15

Netherlands

Schaesburg

35,400

96.99

Netherlands

Schinnen

35,400

96.99

Netherlands

Schiphol

52,900

144.93

Netherlands

Ypenburg

56,400

154.52

Netherlands Antilles

Curacao

45,800

125.48

New Zealand

Wellington

33,800

92.60

Nigeria

Abuja

36,000

98.63

Oman

Muscat

41,300

113.15

Panama

Panama City

39,500

108.22

Peru

Lima

39,100

107.12

Philippines

Cavite

39,500

108.22

Philippines

Manila

39,500

108.22

Poland

Warsaw

40,900

112.05

Portugal

Alverca

43,200

118.36

Portugal

Lisbon

43,200

118.36

Qatar

Doha

45,888

125.72

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

Singapore

Singapore

82,300

225.48

Slovenia

Ljubljana

49,600

135.89

South Africa

Pretoria

39,300

107.67

Spain

Barcelona

40,600

111.23

Spain

Madrid

57,600

157.81

Spain

Rota

35,200

96.44

Switzerland

Bern

70,500

193.15

Switzerland

Geneva

100,400

275.07

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

36,800

100.82

United Kingdom

Cambridge

35,700

97.81

United Kingdom

Caversham

73,800

202.19

United Kingdom

Cheltenham

43,500

119.18

United Kingdom

Croughton

36,600

100.27

United Kingdom

Fairford

34,600

94.79

United Kingdom

Farnborough

54,700

149.86

United Kingdom

Felixstowe

34,400

94.25

United Kingdom

Gibraltar

44,616

122.24

United Kingdom

Harrogate

38,600

105.75

United Kingdom

High Wycombe

62,100

170.14

United Kingdom

Huntingdon

36,800

100.82

United Kingdom

Kemble

34,600

94.79

United Kingdom

Lakenheath

46,700

127.95

United Kingdom

London

69,500

190.41

United Kingdom

Loudwater

56,700

155.34

United Kingdom

Menwith Hill

38,600

105.75

United Kingdom

Mildenhall

46,700

127.95

United Kingdom

Oxfordshire

36,100

98.90

United Kingdom

Plymouth

36,100

98.90

United Kingdom

Portsmouth

36,100

98.90

United Kingdom

Reading

62,100

170.14

United Kingdom

Rochester

37,100

101.64

United Kingdom

Samlesbury

36,800

100.82

United Kingdom

Southampton

44,200

121.10

United Kingdom

Surrey

48,402

132.61

United Kingdom

Waterbeach

36,900

101.10

United Kingdom

Wiltshire

34,800

95.34

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 Wilt-shire

37,900

103.84

 

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 2022 ADJUSTED HOUSING LIMITATIONS TO 2021 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 2021” in Notice 2021-18. A qualified individual incurring housing expenses in such a location during 2021 may apply the adjusted limitation on housing expenses provided in Section 3 of this notice for 2022 in lieu of the amounts provided in the “Table of Adjusted Limitations for 2021” in Notice 2021-18 (and as set forth in the Instructions to Form 2555, Foreign Earned In-come, for 2021).

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 2023 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2022 taxable year.

SECTION 5. EFFECT ON OTHER DOCUMENTS

This notice supersedes Notice 2021-18, 2021-11 I.R.B. 911.

SECTION 6. EFFECTIVE DATE

This notice is effective for taxable years beginning on or after January 1, 2022. However, as provided in Section 4, taxpayers may apply the 2022 adjusted housing limitations contained in Section 3 of this notice to his or her taxable year beginning in 2021.

SECTION 7. 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 number).

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