In Rev. Proc. 2020-14, the IRS released a supplemented list of countries for which some of the foreign earned income exclusion requirements of IRC §911 are waived for 2019 (with departure dates) [Rev. Proc. 2020-14; 2020-16 IRB 661].

The list contains the following five countries:

1. Democratic Republic of the Congo (with a departure date of January 13, 2019)
2. Haiti (with a departure date of February 14, 2019)
3. Iraq (with a departure date of May 14, 2019)
4. Sudan (with a departure date of April 11, 2019)
5. Venezuela (with a departure date of January 24, 2019)

IRC §911 allows a “qualified individual” to exclude foreign earned income from gross income up to a certain amount ($105,900 in 2019; $107,600 in 2020). An employer need not withhold federal income tax from any wages paid to a qualifying employee it reasonably believes will be excluded under IRC §911. A qualifying individual is an individual who is a U.S. citizen and a bona fide resident of or present in a foreign country for a specified portion of the taxable year.

IRC §911(d)(4) provides an exception to the residency and presence eligibility requirements if an otherwise qualified individual did the following:

• Leaves a listed foreign country because of war, civil unrest, or similar adverse conditions that preclude the normal conduct of business
• On or after a certain date
• Pursuant to a determination by the Secretary of the Treasury (in consultation with the Secretary of State)

In such a case, the income exclusion will apply even though the individual was not in the foreign country for the statutorily prescribed period, if the individual can show that but for the adverse conditions he or she had a reasonable expectation of meeting the requirements of IRC §911.

Jyme Mariani, Esq., is Managing Editor of Payroll Information Resources for the American Payroll Association (APA) and the Global Payroll Management Institute (GPMI).