Updated October 18, 2026. Quick answer: The Foreign Earned Income Tax Worksheet is the worksheet you use to figure your tax when you claimed an exclusion or deduction on Form 2555. It takes your taxable income from Form 1040, adds back the excluded amount, figures tax on the larger total, then subtracts tax on the excluded part. The result goes in the entry space on Form 1040 or 1040-SR, line 16.
What this worksheet is for
The Form 1040 instructions send you here in one sentence: “If you claimed the foreign earned income exclusion, housing exclusion, or housing deduction on Form 2555, you must figure your tax using the Foreign Earned Income Tax Worksheet.” The instructions repeat the point for each of the other tax methods: “But if you are filing Form 2555, you must use the Foreign Earned Income Tax Worksheet instead.” The worksheet opens with a warning: “If Form 1040 or 1040-SR, line 15, is zero, don’t complete this worksheet.” Form 2555 itself is explained on the Form 2555 page. If your question is whether the exclusion reaches investment income, see does the foreign earned income exclusion cover investment income.
The worksheet line by line
Each right-hand cell below is the worksheet’s own wording for that line.
| Line | What the worksheet says |
|---|---|
| 1 | “Enter the amount from Form 1040 or 1040-SR, line 15” |
| 2a | “Enter the amount from your (and your spouse’s if filing jointly) Form 2555, lines 45 and 50” |
| 2b | “Enter the total amount of any itemized deductions or exclusions you couldn’t claim because they are related to excluded income” |
| 2c | “Subtract line 2b from line 2a. If zero or less, enter-0-” |
| 3 | “Add lines 1 and 2c” |
| 4 | “Figure the tax on the amount on line 3.” |
| 5 | “Figure the tax on the amount on line 2c.” “If the amount on line 2c is less than $100,000, use the Tax Table to figure this tax.” “If the amount on line 2c is $100,000 or more, use the Tax Computation Worksheet” |
| 6 | “Subtract line 5 from line 4. Enter the result. If zero or less, enter-0-.” “Also include this amount on the entry space on Form 1040 or 1040-SR, line 16” |
Line 4 is the line that sends you to another method. The worksheet lists the choices: “Use the Tax Table, Tax Computation Worksheet,” and it points back to the line 16 instructions to see which one applies. It also bars a loop: “Don’t use a second Foreign Earned Income Tax Worksheet to figure the tax on this line.” If your line 4 method is the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, a footnote adds steps: “Next, you must determine if you have a capital gain excess.” Read that footnote on the worksheet itself. The plain tax computation method is at the Tax Computation Worksheet page.
A worked example
This is an illustration, not an IRS example. The tax amounts on lines 4 and 5 are invented, because they come from the Tax Table or another method, which this page does not reproduce.
| Worksheet line | Invented amount | How it is reached |
|---|---|---|
| Line 1 (Form 1040 line 15) | $60,000 | Invented input |
| Line 2c (after lines 2a and 2b) | $40,000 | Invented input |
| Line 3 (line 1 plus line 2c) | $100,000 (computed) | 60,000 plus 40,000 |
| Line 4 (tax on line 3) | $18,000 | Invented; in a real return this comes from the Tax Table or other method |
| Line 5 (tax on line 2c) | $4,500 | Invented; in a real return this comes from the Tax Table |
| Line 6 (line 4 minus line 5) | $13,500 (computed) | 18,000 minus 4,500 |
The point of the example is the shape of the computation: tax on the larger total, less tax on the excluded part.
Where the number comes from
Two places feed the top of the worksheet. Line 1 is “the amount from Form 1040 or 1040-SR, line 15”, which is your taxable income, covered at Form 1040 lines 14 and 15. Line 2a comes from Form 2555, lines 45 and 50, for you and, if filing jointly, your spouse. Line 2b is for deductions you could not claim because they relate to excluded income.
Where it goes next
The last line of the worksheet says to “Also include this amount on the entry space on Form 1040 or 1040-SR, line 16”. That entry is the tax shown on Form 1040 line 16. From there the Form 1040 return carries on to the lines after it. The rest of the booklet is mapped at Form 1040 line by line.
Edition and line numbers
This page reads the 2025 Instructions for Form 1040 and 1040-SR, the current file irs.gov served on 2026-10-18. It is byte-identical to the archived copy, and the worksheet is the one for the tax year 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own instructions and use that year’s line numbers, because a different year’s worksheet can number or word its lines differently. The other worksheets in the booklet are collected at Form 1040 worksheets.
Common mistakes
- Using the Tax Table or another method alone after filing Form 2555. The instructions say “But if you are filing Form 2555, you must use the Foreign Earned Income Tax Worksheet instead.”
- Using a second copy of this worksheet to get the line 4 tax. The worksheet says “Don’t use a second Foreign Earned Income Tax Worksheet to figure the tax on this line.”
- Using the Tax Table for line 5 when line 2c is large. The worksheet says “If the amount on line 2c is $100,000 or more, use the Tax Computation Worksheet”
Related: Form 2555, Form 1040 line 16, Qualified Dividends and Capital Gain Tax Worksheet, and Form 1040 lines 14 and 15.
Sources
- Instructions for Form 1040 and 1040-SR (2025): https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
- Form 1040 (2025): https://www.irs.gov/pub/irs-pdf/f1040.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.