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I am a contractor working part of the year overseas and much of it in a combat zone. Lets set the combat zone portion aside for a moment for the purpose of the discussion.
Lets say I am a contractor, working overseas for part of the year and want to claim the foreign earned income tax exclusion what eligibility requirements do I need to meet in order to claim the exclusion?
Now lets add to the mix this work is in a combat zone; now what requirements to I need to meet in order to claim the exclusion?
In both cases, even before the "new law", the contractor qualified for the foreign earned income tax exclusion as long as they met the 330 days abroad test. With that being the case, what was the purpose of the new law? What is different between combat zone vs non-combat zone employment?
My interpretation is that the new law, treats Combat zone contract workers in a similar manner as active duty military members. "U.S. citizens or resident aliens, specifically contractors or employees of contractors supporting U.S. Armed Forces in designated combat zones" may claim the exemption without establishing an "abode" overseas and retain their "abode" within the U.S.
As stated by qbteachmt its in the title of the irs.gov article "
New law makes clear: Combat zone contract workers qualify for foreign earned income exclusion"
It is my understanding that being a contractor in a combat zone is what qualifies you and negates the physical presence test, bona fide residence test and tax home test.
The whole point of this new law was to enable contractors in a combat zone (less than 330) to be eligible for the exclusion - otherwise whats the point of the new law - since these people, regardless of combat zone or not, would be eligible as long as they meet the standard requirements for the exclusion.