Foreign Earned Income Exclusion

Certain U.S. citizens or resident aliens, specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, may now qualify for the foreign earned income exclusion. The Bipartisan Budget Act of 2018 changed the tax home requirement for eligible taxpayers, enabling them to claim the foreign earned income exclusion even if their "abode" is in the United States, and it applies for tax year 2018 and subsequent years.

Just got this in my inbox. This is really good, the abode issue has had me gun shy for years.

I rarely get pumped up about IRS press releases, but this is fantastic news. I have half a dozen clients who are going to think I am Santa Claus when I tell them this.

Does this mean that contractors working in a combat zone will no longer have to meet the 330 day rule?

No. Only the "abode" requirement has been changed.

Interpretation Question...

Who must be in the designated combat zone? Does the employee have to be physically in the DCZ or just supporting the USAF in a DCZ.

My client did OCONUS work as a contractor in multiple locations. Part of his work was done from the UK in support of USAF operations. Let's say he was physically in a combat zone 50% of the time and 50% not in a combat zone, does his tax home still qualify as foreign?

If all the other factors permit FEIE, does he still qualify?