Introduction

If you claimed the Foreign Earned Income Exclusion (FEIE) incorrectly or omitted required information, you generally fix it by filing an amended federal return (Form 1040-X). Correcting FEIE errors promptly reduces the chance of penalties, interest, or a CP2000 notice from the IRS. See the IRS guidance on the FEIE and Form 1040-X for authoritative details (IRS). IRS: Foreign Earned Income Exclusion • IRS: About Form 1040-X.

When you should amend

  • You claimed more exclusion than you were eligible for (wrong eligibility test or miscalculated amount).
  • You forgot to attach or properly complete Form 2555 (or used the wrong form).
  • You misreported foreign wages because of incorrect currency conversion or omitted income.
  • You should have claimed the Foreign Tax Credit (Form 1116) instead of FEIE or vice versa.

Step-by-step: How to amend an FEIE error

  1. Identify the error and gather documents
  • Which tax year(s) are affected? (You may need to amend multiple years.)
  • Assemble pay statements, foreign tax returns, passport entry/exit stamps, housing records, and the original Form 2555 and 1040.
  1. Prepare Form 1040-X
  • Use Form 1040-X to change amounts and explain each change in Part III (or the explanation area depending on the version). Cite the specific line changes and reference the corrected Form 2555 where applicable.
  • For detailed examples on when to use Form 1040-X, see our guide: When to Use Form 1040-X: Amended Return Essentials.
  1. Attach corrected supporting forms
  • Include a corrected Form 2555 (or Form 2555-EZ if applicable). See our walkthrough for Form 2555: Form 2555 — Foreign Earned Income.
  • If you switch to the foreign tax credit instead, attach Form 1116 and supporting foreign-tax-paid documentation.
  1. Explain the change clearly
  • Provide a concise statement: what was wrong, how you calculated the corrected amount, and the documents that support the correction (currency conversion method, dates used for physical presence, employer letters).
  1. File and pay any tax due
  • If the amendment increases tax, pay the balance with the amended return to stop further interest and potential penalties.
  • If you expect a refund, request it on Form 1040-X. Refund claims generally follow the normal statute of limitations (see Timing & deadlines below).
  1. Monitor and respond
  • Keep copies and watch correspondence from the IRS. If the IRS questions your amendment, provide the supporting documents you compiled.

Documentation checklist

  • Corrected Form 2555 (with housing amounts if claimed)
  • Employer pay records and foreign payroll statements
  • Foreign tax returns or proof of tax paid
  • Passport stamps, travel logs, or residency lease/utility bills (for bona fide residence or physical presence tests)
  • Currency-conversion worksheets showing the exchange rates and source used
  • A signed explanation letter describing the error and corrections

Timing & deadlines

  • Refunds: Generally, you must file Form 1040-X within three years of the date you filed the original return or within two years of paying the tax, whichever is later. This is the normal refund statute of limitations—confirm current guidance on the IRS site.
  • Multiple years: If more than one tax year is affected, file separate Form 1040-X for each year.

Penalties and interest

  • Amending to report additional tax will usually trigger interest from the original due date. Penalties may apply unless you can show reasonable cause. Reasonable cause documentation (e.g., reliance on a preparer’s incorrect advice) can help reduce or eliminate penalties.

Special situations to watch

  • Treaty positions: If you relied on a tax treaty instead of FEIE, the amendment may need treaty citations and supporting treaty residency facts.
  • FBAR and FATCA: Amending FEIE does not automatically fix FBAR or Form 8938 reporting; check offshore-reporting obligations separately.
  • Joint returns: If the change affects a married filing jointly return, both spouses’ positions may need adjustment; consider state return impacts.

When to consult a pro

  • Complex facts (mixed-source income, contractor vs employee, or overlapping treaty claims).
  • Large amounts or multiple-year errors where penalties and interest could be substantial.
  • When the IRS contacts you about a discrepancy (CP2000 or audit notice).

Related reading

Authoritative sources

Professional disclaimer

This article is educational and not a substitute for personalized tax advice. For guidance tailored to your situation, consult a qualified tax professional experienced in expat tax issues.