News & Resources


IRS Announces 2022 High-Cost Locations for Foreign Housing Exclusions

BY: Jyme Mariani, Esq. | 03/10/22

The IRS issued a notice providing adjustments to the limitation on housing expenses for specific locations for purposes of the foreign housing cost exclusion under IRC §911 [Notice 2022-10, 2022-10 IRB 815]. The U.S. Secretary of the Treasury makes annual adjustments to this limit based on geographic differences in housing costs.

Notice 2022-10 is effective for taxable years beginning on or after January 1, 2022. However, a taxpayer may elect to apply the 2022 adjusted housing limitations contained in the notice to his/her taxable year beginning in 2021.

Exclusions Allowed

IRC §911 generally allows a U.S. citizen or resident living abroad to exclude from U.S. taxable income certain foreign earned income. A qualified individual is also allowed an exclusion from gross income for certain housing costs paid or incurred on his/her behalf that exceed a certain base housing amount.

A qualified individual incurring housing expenses in one or more of the listed high-cost localities in 2022 may use the adjusted limit specified (instead of $33,600) in determining the housing cost amount on Form 2555, Foreign Earned Income. The $33,600 limit continues to apply to a qualified individual not incurring housing expenses in a listed high-cost locality.

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Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Senior Manager of Payroll Information Resources for the APA.