Physical Presence Test for Digital Nomads
The Physical Presence Test requires 330 full days outside the US in a 12-month period. Learn day-counting methods, common mistakes, and how to track travel for digital nomads.
The Foreign Earned Income Exclusion (FEIE) is the most valuable tax break for American digital nomads. It allows you to exclude up to $132,900 of earned income from federal tax in 2026. To claim it, you must pass either the bona fide residence test or the physical presence test.
For digital nomads, the physical presence test is usually the only option. The bona fide residence test requires you to establish a genuine residence in a specific foreign country — hard to do when you move every six weeks. The physical presence test only requires counting days.
This post explains exactly how the 330-day rule works, how to count days correctly, and the mistakes that cost nomads thousands in lost exclusions.
The Rule: 330 Full Days in a 12-Month Period
The physical presence test requires that you be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
Key phrases:
- Physically present: You must actually be in a foreign country. Video calls from a US apartment do not count.
- Full days: A full day is a calendar day. Partial days count as full days if you are present at any time during the day, with one exception.
- Any period of 12 consecutive months: You can choose any 12-month window. It does not have to align with the calendar year or your tax year.
- Foreign country or countries: The days can be spread across multiple countries.
What Counts as a Foreign Day
Arrival Days Count
If you arrive in a foreign country at any time during a calendar day, that day counts as a full foreign day.
Example: You fly from Miami to Lisbon. You land at 8:00 PM on June 15. June 15 counts as a full day outside the US.
Departure Days: The Exception
If you leave a foreign country and travel to the US, the day of departure does not count as a foreign day. This is the only exception.
Example: You fly from Lisbon to New York. You depart Lisbon at 11:00 AM on July 10. July 10 does not count as a foreign day.
However, if you depart Lisbon and fly to Bangkok (not the US), July 10 counts as a foreign day because you were present in a foreign country during that day.
Transit Days
If you are in transit through a foreign country and do not leave the airport, the day generally counts as a foreign day if you are present in that country at any time. But if you are in international airspace or waters for the entire day while traveling to or from the US, that day is a US day.
In practice, most nomads do not spend full days in transit. A layover of a few hours on a travel day does not usually create a separate full-day issue.
International Waters and Cruises
Days spent in international waters are not foreign days. If you are on a cruise ship in international waters, those days do not count toward the 330. If the ship is in port in a foreign country, those days count.
Digital nomads who work from cruise ships must track port days and sea days separately.
Medical Emergencies and Conflicts
The IRS allows an exception if you are forced to leave a foreign country due to war, civil unrest, or similar conditions, or if you are hospitalized for a medical condition. The days you would have been present but for the emergency may still count. This requires documentation and is rarely used by nomads.
Choosing the 12-Month Period
This is where nomads can get creative. The 12-month period does not have to be January 1 to December 31. It can be any 12 consecutive months.
Standard Calendar Year
Most taxpayers use the calendar year. If you were abroad for all of 2025 except two weeks at Christmas, you have 349 foreign days and easily pass.
Overlapping Tax Years
If your travel straddles two tax years, you can use a 12-month period that overlaps both years.
Example: You leave the US on March 15, 2025, and return on March 14, 2026. Your 12-month period is March 15, 2025, to March 14, 2026. You have 365 foreign days.
- For your 2025 tax return, you claim the FEIE for the foreign days that fall in 2025 (March 15 to December 31 = 292 days).
- For your 2026 tax return, you claim the FEIE for the foreign days that fall in 2026 (January 1 to March 14 = 73 days).
- Total exclusion across both years: $132,900 for 2025 + prorated amount for 2026 (73/365 × $132,900 = ~$26,560).
This overlapping method is standard for anyone who moves mid-year and stays abroad for a full year.
Maximizing the Exclusion Across Years
Some nomads structure their travel to use two 12-month periods across three tax years, maximizing the prorated exclusion.
Example:
- 12-month period 1: June 1, 2025, to May 31, 2026.
- 12-month period 2: June 1, 2026, to May 31, 2027.
In 2026, you have two overlapping 12-month periods. You use the period that gives you the most foreign days for your 2026 exclusion.
The 35-Day Budget
With 365 days in a year and a 330-day requirement, you have a budget of 35 US days per year. That is not much.
What Counts as a US Day
Any day you are physically present in the US, Puerto Rico, the US Virgin Islands, Guam, American Samoa, or the Northern Mariana Islands counts as a US day.
This includes:
- Vacations to visit family.
- Business trips to meet clients.
- Weekends for weddings or funerals.
- Medical appointments.
- Days in transit through the US (if you clear customs and enter US territory).
Common Nomad Mistakes
Mistake 1: The Thanksgiving Trip
You spend 330 days abroad but return to the US for Thanksgiving (Thursday) and stay through the weekend (Sunday). That is 4 US days. You also took a long weekend in July (3 days) and a week at Christmas (7 days). Total: 14 days. You are fine.
But if you also took a 2-week summer vacation (14 days), a business trip (5 days), and a funeral (3 days), you are at 36 days. You fail by one day and lose the entire exclusion.
Mistake 2: The Midnight Connection
You fly from Lisbon to Miami, leaving Lisbon at 11:30 PM on December 31 and arriving Miami at 6:00 AM on January 1. December 31 does not count as a foreign day because you departed for the US. January 1 is a US day. You lose a day on both ends.
Mistake 3: The Cruise
You spend 30 days on a Caribbean cruise working from the ship. The ship is in international waters for 20 of those days. Only the 10 port days count as foreign days. You thought you had 340 foreign days; you actually have 330. One unexpected trip to the US and you fail.
How to Track Days
You need a system. The IRS does not accept "I think I was abroad." If audited, you must produce evidence.
Method 1: Spreadsheet
A simple spreadsheet with columns:
- Date
- Location (city, country)
- US day or foreign day
- Evidence (flight number, passport stamp, hotel receipt)
Update it weekly. Do not rely on memory at tax time.
Method 2: Passport Stamps and Travel Records
- Keep a copy of every passport stamp.
- Save every flight confirmation email.
- Screenshot mobile boarding passes before they expire.
- Save hotel and Airbnb receipts with dates.
- Download CBP I-94 records for US entries at i94.cbp.dhs.gov.
Method 3: Calendar Apps
Use Google Calendar or Apple Calendar to log your location every day. Set a recurring reminder to update it. Export the calendar at year-end as a PDF.
Method 4: Location Data
Your phone's location history (Google Timeline, Apple Significant Locations) can reconstruct your travel. This is admissible evidence in an audit but should be a backup, not your primary record.
The Prorated Exclusion
If your 12-month period includes only part of the tax year, the FEIE is prorated.
Formula: Maximum exclusion × (Number of foreign days in the tax year / Number of days in the 12-month period)
Example: Your 12-month period is June 1, 2025, to May 31, 2026 (365 days). In the 2025 tax year, you have 214 foreign days (June 1 to December 31).
Prorated exclusion for 2025: $132,900 × (214 / 365) = $77,878.
You cannot claim the full $132,900 in 2025 because your 12-month period only overlaps part of the year. But in 2026, you claim the remainder.
What Happens If You Fail by One Day?
If you have 329 foreign days instead of 330, you fail the physical presence test entirely. You cannot claim the FEIE for that 12-month period. There is no partial credit. One day costs you the entire exclusion.
This is why I tell every nomad: build a buffer. Aim for 340 foreign days, not 330. Life happens — family emergencies, flight cancellations, missed connections. A 10-day buffer protects you.
The FEIE vs. Self-Employment Tax
Even if you pass the physical presence test and exclude $132,900 of self-employment income, you still owe US self-employment tax of 15.3% on the net earnings. The FEIE eliminates income tax but not SE tax.
If you are an employee of a US company working remotely, FICA (Social Security and Medicare) is withheld from your paycheck. The FEIE reduces your income tax but FICA still applies unless your employer is foreign or a Totalization Agreement applies.
How FileAbroad Helps
FileAbroad works with digital nomads on FEIE qualification and day-counting:
- Day-counting review: We audit your travel records and calculate your 12-month periods.
- 12-month period optimization: We select the period that maximizes your exclusion.
- Prorated exclusion calculation: We compute the exact exclusion for split-year returns.
- Self-employment tax planning: We model SE tax and Totalization Agreement options.
- Audit defense: We represent you if the IRS questions your foreign days.
For physical presence test planning, start with the free intake and upload your travel itinerary or calendar.
Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or investment advice. Tax laws change frequently, and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.
Official IRS sources
Still unsure about your filing situation?
If this article raised more questions than it answered, that is normal.
Tax rules depend on your exact facts: your country, your income, your accounts, your filing history. I review every intake personally and reply within one business day. If FileAbroad can accept the work, we schedule a paid consultation and you receive a written scope before any preparation begins.
No tax documents here — just the broad facts.
Frequently Asked Questions
Do I need to be in one country for 330 days to pass the Physical Presence Test?
No. The 330 days can be spent in any number of foreign countries. You do not need to establish residence in any particular country. You only need to be physically present in a foreign country or countries for 330 full days during any 12-month period. A 'full day' means any 24-hour period starting at midnight. The day you arrive in a foreign country counts as a full day if you are present at any time during that day. The day you depart a foreign country does not count if you are in transit to the US. Days spent in international waters or airspace do not count as foreign days. You can bounce between Portugal, Thailand, Mexico, and Japan and still qualify as long as you are outside the US for 330 full days.
What counts as a 'full day' outside the US?
A full day is any 24-hour period starting at midnight during which you are physically present in a foreign country. If you arrive in Paris at 6:00 PM on March 1, March 1 counts as a full foreign day. If you depart Paris at 10:00 AM on March 31, March 31 does not count as a foreign day if you are traveling to the US. However, if you depart Paris on March 31 and arrive in Bangkok on April 1, March 31 counts as a foreign day because you were present in a foreign country at some point during that day. The general rule: any day with any foreign presence counts as a foreign day, except days of departure from a foreign country to the US, which do not count. Days in international waters or airspace while traveling to or from the US are US days, not foreign days.
Can I use multiple 12-month periods to maximize the FEIE?
Yes, and you should. The 12-month period for the Physical Presence Test can begin on any day of any month. You choose the 12-month period that gives you the maximum exclusion. Most taxpayers align it with the calendar year or their tax year, but digital nomads often benefit from selecting a 12-month period that captures the most foreign days. You can also overlap 12-month periods across tax years. For example, a 12-month period running from July 1 to June 30 can span two tax years, allowing you to claim the FEIE in both years for the days that fall within each tax year. This is a powerful strategy for nomads who move mid-year.
Continue with a guide
Guide
FEIE Guide: Form 2555, Qualification Tests, and Tax Tradeoffs
How the Foreign Earned Income Exclusion works, the foreign tax home requirement, the Physical Presence and Bona Fide Residence tests, Form 2555, and the tradeoffs to consider before claiming the exclusion.
Guide
Digital Nomad Taxes for Americans: FEIE, Tax Home, and Reporting
Digital nomad tax planning for U.S. citizens abroad: physical presence, bona fide residence, tax home, self-employment, foreign accounts, state taxes, and visa realities.
About the Author
Chip Moreno is an American expat and PTIN holder based in Cuenca, Ecuador. He files his own FBAR and US return from Ecuador every year. Most expat tax firms are call centers in Ohio — Chip does the opposite: you work directly with him from first review to filing. Every engagement starts with a paid consultation or reach out here.