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A client relocates to American Samoa mid-year, assumes a government W-2 there qualifies for the full exclusion, and overlooks a short trip back to the mainland. Both assumptions can cost the exclusion. Wages from the U.S. Government are not excludable on a U.S. return even when you live and work in American Samoa, and the presence test depends on days the client may not be tracking.
Form 4563 attaches to Form 1040 or 1040-SR and lets a bona fide resident of American Samoa for the entire tax year exclude qualifying American Samoa source income on Line 15. Residency is a three-part test, presence plus tax home plus closer connection, and presence can be met by options including 183 days in the year or 549 days over three years with at least 60 days in each. Self-employment tax still applies on net SE earnings of $400 or more even when the income is excluded, and the 2025 return is due April 15, 2026, extending to October 15, 2026 via Form 4868.
Key Takeaways
- You use Form 4563 to exclude qualifying American Samoa–source income if you are a bona fide resident under IRC 937, and you attach it to Form 1040, not by itself.
- Residency is a three part test, presence plus tax home plus closer connection. Presence can be met by several options, including 183 days in the year or 549 days over three years with at least 60 days each year, plus alternative tests involving 90 days in the U.S., the $3,000 U.S. earned income cap with more days in the territory than in the U.S., or no significant U.S. connection.
- Wages from the U.S. Government are not excludable on your U.S. return, even if you live and work in American Samoa.
- You can still owe self‑employment tax and may need to file Form 1040‑SS if you do not otherwise file a U.S. return.
- Attach Form 4563 to your Form 1040 by your normal due date. Filing and extension rules follow regular 1040 timelines, and special disaster extensions can apply.
What Form 4563 is, and who actually qualifies
Form 4563 is how you tell the IRS, I am a bona fide resident of American Samoa and I am excluding American Samoa–source income that qualifies under IRC 931. You attach the form to your Form 1040. You do not file it on its own. If all of your income is from American Samoa sources, you may not need a U.S. return at all, but there are important exceptions, especially for U.S. Government pay and self‑employment tax.
To qualify as a bona fide resident, you must pass three tests for the tax year:
- Presence test, choose one of several ways to qualify
- Tax home in American Samoa
- Closer connection to American Samoa than to the United States or any foreign country
These rules come from IRC 937 and the Treasury regulations, and they are explained in IRS Publication 570 each year.
Presence test, your four main ways to qualify
Here is a quick summary of the recognized presence paths. Meeting any one of them can satisfy presence for bona fide residency, as long as you also meet the tax home and closer connection tests.
| Presence option | Core requirement | Extra guardrails you must respect |
| 183‑day rule | At least 183 days in American Samoa during the tax year | Standard tax home and closer connection rules apply |
| 549‑day three‑year rule | At least 549 days in American Samoa during the current year and two prior years, with at least 60 days in each of the three years | Standard tax home and closer connection rules apply |
| 90‑day U.S. rule | Present in the United States no more than 90 days during the tax year | Standard tax home and closer connection rules apply |
| $3,000 U.S. earned income rule | U.S. earned income is no more than $3,000 for the year, and you are in American Samoa for more days than in the U.S. | Standard tax home and closer connection rules apply |
All four alternatives appear in Treas. Reg. 1.937‑1. There is also a presence path based on having no significant connection to the United States. The regulation defines significant connection with examples like a permanent home, voter registration, spouse, or minor child in the U.S.
Pro tip, count every day you are physically in American Samoa, even part days count as days of presence. Certain medical absence days can also count toward presence under the regulations, which helps when life happens.
Tax home and closer connection, in plain English
- Tax home means your regular place of business or, if you have no fixed business location, your primary home base for work. For this exclusion, that home base must be in American Samoa.
- Closer connection is about your anchors, where your family lives, where you vote, bank, register vehicles, hold your main home, and where your social and civic ties live. Your ties should be stronger in American Samoa than in the United States.
Publication 570 walks through these tests and provides mailing addresses and special rules for American Samoa residents. When you move into or out of bona fide resident status, Form 8898 may be required if your worldwide income is over $75,000 for that year, and the penalty for not filing can be $1,000.
Why firms and individuals stumble on Form 4563
- Thin or inconsistent day logs, especially for short U.S. trips
- Sloppy sourcing of wages and self‑employment income
- Missing documentation for interest or dividends that are not from American Samoa payors
- U.S. Government wage mistakes, which are never excludable on your U.S. return
In our work supporting CPA and EA teams, the most common clean up is simple, get precise on the day count and source rules before you start the return. It saves hours in review and protects the exclusion.
The presence test with examples you can actually use
Let’s make this real with quick, common scenarios. These are simplified to illustrate the presence rules, always check your full facts.
- The 183‑day year. You spend 190 days in American Samoa, 80 days in the United States, and the rest abroad. Presence is satisfied under the 183‑day rule. If your tax home and closer connection are in American Samoa, you are a bona fide resident for the year.
- The three‑year track. You logged 200 days in each of the last two years, but only 150 days this year. You still pass presence because you have 550 days over three years and at least 60 days in each year. Confirm tax home and closer connection, then proceed.
- The 90‑day U.S. limit. You could not get to 183 days in American Samoa, but you kept your time in the United States to 75 days. Presence is still met under the 90‑day U.S. rule if tax home and closer connection are in American Samoa.
- The $3,000 earned income rule. You traveled to the United States for a short project and earned $2,800 there, but you were physically in American Samoa for more days than in the U.S. Presence is met under the U.S. earned income rule.
Remember, if you hold a permanent home or similar significant ties in the United States, you might fail presence unless you meet one of the other specific presence routes. The regulation spells out what “significant connection” looks like.
Documentation, what to save and how to avoid a headache later
Here is a practical checklist we use with teams that support taxpayers claiming the exclusion.
- A day‑by‑day log for the tax year, plus two prior years, showing where you woke up and where you slept
- Travel proofs, boarding passes, ferry or boat logs, passport stamps where applicable
- Lease or deed, utility bills, voter registration, driver license, vehicle registration in American Samoa
- Employer letters describing where services were performed, and for self‑employed, engagement letters and timesheets
- Bank letters for interest sourced to American Samoa, and issuer details for dividends from American Samoa entities
- Notes explaining any medical absences, including the person treated and dates, since some days outside the territory can still count toward presence under the rules
Publication 570 provides the context, and the regulations give examples that help when edge cases come up.
When you move in or out midyear
If you become or cease to be a bona fide resident during the year and your worldwide gross income for that year is over $75,000, you may need to file Form 8898. The IRS page clarifies who must file and notes a $1,000 penalty for not filing when required. File it for the year of the change.
The income that qualifies, and what does not
The exclusion is about where income is sourced, not about citizenship status alone. In broad strokes:
- Wages you earn for services performed in American Samoa are American Samoa–source and can be excluded on your U.S. return if you are a bona fide resident, except for U.S. Government wages. If you worked both in and outside American Samoa during the year, only the wages earned while you were physically in American Samoa qualify, regardless of where the employer is located.
- Business and self‑employment income that is effectively connected with a trade or business in American Samoa can qualify. The regulations apply U.S. section 864 principles to a territory, so you look at where the activities happen, the customers, the office, and similar factors.
- Interest and dividends can qualify when paid by qualifying American Samoa payors. Publication 570 explains how to treat those items and reminds you that deductions and credits that relate to excluded income are not allowed on the U.S. return.
- Capital gains tied to American Samoa real property, plus rents and royalties from property in the territory, can qualify. Publication 570 summarizes this alongside the exclusion mechanics.
Here is a simple reference you can keep nearby.
| Income type | Often excludable on Form 4563 if you are a bona fide resident | Usually not excludable |
| Wages for services performed in American Samoa | Yes | Wages for services performed in the United States |
| U.S. Government wages, even if the work is in American Samoa | No, always taxable on the U.S. return | N, A |
| Self‑employment income from work done in American Samoa | Yes, but self‑employment tax may still apply | Self‑employment income from U.S. work |
| Interest and dividends from American Samoa payors | Often yes | Interest or dividends from U.S. payors |
| Capital gains on American Samoa real property | Often yes | Gains on U.S. real property |
Publication 570 also reminds you that if you exclude territory income on your U.S. return, you cannot claim deductions or credits that relate to that excluded income. Keep that in mind for Form 1116 and any expense allocations.
Self‑employment tax, 1040‑SS, and other filing details
Even if you exclude all American Samoa–source net earnings from U.S. income tax, you may still owe self‑employment tax. If you are not otherwise required to file a U.S. income tax return, you file Form 1040‑SS to report self‑employment income and pay SE tax. Publication 570 gives the current rules and even lists where to mail the return if you are paper filing.
If part of your self‑employment income is excluded and part is not, Publication 570 shows how to allocate the deductible half of self‑employment tax. The IRS gives a simple fraction to compute the deductible portion that ties to the nonexcluded income.
Deductions and credits you cannot take on excluded income
If you exclude income from American Samoa on your U.S. return, you cannot take deductions or credits that directly or indirectly relate to that excluded income. This includes parts of Form 1116 for foreign tax credit, which must be reduced using the IRS formula in Publication 570. Deductions that are NOT definitely related to a particular type of income (such as the standard deduction, charitable contributions, medical and dental expenses, and mortgage interest on your personal residence) cannot be taken in full either, they must be allocated between your excluded American Samoa income and your other income per chapter 4 of Pub. 570.
How to complete and attach Form 4563, step by step
Quick rule, confirm bona fide residency first, then fill the form. You attach it to Form 1040, you do not send it alone.
- Part I, Residency information. List your dates in American Samoa, your addresses, employer or business details, and every absence with the date you left, the date you returned, and the reason. This supports the presence test and closer connection story. Publication 570 explains what the IRS will expect to see if they ask questions.
- Part II, Income eligible for exclusion. Enter only American Samoa–source amounts in the lines for wages, interest, dividends, business income, capital gains, rents and royalties, farm income, and other items. Total the lines to compute the exclusion, then attach to your 1040. The IRS “About Form 4563” page confirms the purpose and attachment rule.
Where to file and timing
Mailing addresses for bona fide residents of American Samoa who must file with the United States are listed in Publication 570. In most cases, you mail to Austin, Texas if no payment is enclosed, and to Charlotte, North Carolina if a payment is enclosed. Always check the current year’s instructions before mailing.
Deadlines match your Form 1040 due date. For the 2024 tax year, the IRS set April 15, 2025, as the deadline, with October 15 for timely extensions. Disaster relief can change dates in specific areas, so verify if relief applies to you.
Common pitfalls and quick fixes
- Mixing U.S. Government wages with excludable wages. Treat federal wages as taxable on your U.S. return. Claim American Samoa tax paid as appropriate under the rules.
- Ignoring day counts from prior years. The 549‑day test looks back two years, so keep three years of records on hand.
- Forgetting Form 8898 in the year you move into or out of status. If your worldwide income exceeds $75,000, file it and avoid the $1,000 penalty per failure, which stacks on top of any criminal penalty provided by law (a reasonable-cause defense is available if the failure was not willful neglect).
- Claiming deductions tied to excluded income. Publication 570 says you cannot take those deducted or credited amounts on the U.S. return.
A quick sanity check before you file
- Do your day counts meet one of the presence options, and does your tax home and closer connection point to American Samoa
- Are all wage and business activities correctly sourced
- Are interest and dividends from qualifying American Samoa payors
- Did you handle self‑employment tax correctly, including Form 1040‑SS if needed
- Is Form 4563 attached to your 1040, and is your address correct for mailing if you paper file
A short note for CPA and EA firm leaders
If your team handles Form 4563 work each season, you know the bottleneck is rarely the form, it is the discipline behind the day count, workpapers, and review. If you want stable capacity without sloppy sourcing or missed SLAs, Accountably integrates trained offshore teams inside your workflow, with structured workpapers and multi layer review that protect partner time. Keep this light touch in mind as you build your seasonal plan.
Final checklist, then file with confidence
- You meet bona fide residency under IRC 937, presence plus tax home plus closer connection
- Your income entries reflect American Samoa sourcing under IRC 931 and the regulations
- You attached Form 4563 to Form 1040 by the deadline or valid extension
- You handled self‑employment tax and any Form 1040‑SS requirements
- You saved proofs for day counts, U.S. trips, and payor sourcing
If a single day or a single W‑2 line item looks off, slow down and fix it now. The exclusion is valuable, and the rules are clear if you track them well. Publication 570 and the IRS pages linked above are your source of truth.
Important note
This guide is educational, not tax advice. The rules cited above are current as of December 1, 2025, based on IRS publications and regulations. If a disaster declaration or new guidance affects your timeline, follow the latest IRS notices for your location.
Common Mistakes We See Every Season
The same handful of errors show up on Form 4563 every year. Almost all of them trace back to treating it like the foreign earned income exclusion or assuming that bona fide residency alone clears every income line for exclusion.
Reusable Checklists
These checklists move from intake through pre-file review. Drop them into your firm's SOP folder, or copy them into a client packet for the 2025 cycle.
Bona fide residence intake packet
- Confirm Line 1: date bona fide residence began and (if applicable) ended during the tax year.
- Capture Line 2 living-quarters type (rented room, rented house or apartment, employer-furnished quarters, or purchased home).
- Document Lines 3a and 3b: family members living with the filer in American Samoa and the period covered.
- Capture Lines 4a and 4b: any home maintained outside American Samoa, address, rental status, occupants, and relationship.
- Record Line 5 employer name and address, or self-employed status.
- Build the Line 6 absence table for every trip out of American Samoa with date left, date returned, days absent, and reason.
- Run the Form 8898 trigger check for any residency begin or end date during the year.
American Samoa source income classification
- Line 7 wages: include only pay for services physically performed in American Samoa; exclude U.S. Government wages entirely.
- Line 8 interest: source by payer location, not depositor residence.
- Line 9 dividends: source by where the paying corporation is created or organized.
- Line 10 business income: confirm trade or business is effectively connected with American Samoa.
- Line 11 capital gain: apply the 10-year special rules under Reg. 1.937-2(f)(1) for property held before residency began.
- Line 12 rental and royalties: source real property by location; check personal property by seller residence.
- Line 13 farm income: tie to American Samoa operations only.
- Line 14 other income: list type and amount; document the source rule used.
- Sum Lines 7 through 14 to Line 15 and reconcile to Form 1040 reporting.
Pre-file review for Form 4563 plus Form 1040
- Verify bona fide residence for the entire tax year, or confirm the Pub. 570 chapter 1 year-of-move analysis is complete.
- Confirm Schedule SE was prepared for any net self-employment earnings of $400 or more, regardless of the exclusion.
- Confirm Form 8898 was filed if a residency transition occurred during the year.
- Build the deduction allocation ratio and apply it to standard deduction, charitable contributions, and other non-definitely-related items per Pub. 570 chapter 4.
- Confirm all worldwide non-excluded income is reported on Form 1040, not just American Samoa source income.
- Confirm mailing address: Austin, TX 73301-0215 when no payment is enclosed, or P.O. Box 1303, Charlotte, NC 28201-1303 when a check or money order is enclosed.
- Attach Form 4563 to Form 1040 or 1040-SR before filing; the form is never filed standalone.
Keep 4563 Season From Stalling
Form 4563 sits on the same April 15, 2026 deadline as Form 1040 for tax year 2025, but the workload behind it is concentrated in two narrow windows: bona fide residence verification at intake and line-by-line source classification before review. Per IRS Publication 570 chapters 2 and 4, the same Line 7 through Line 14 figures drive both the Line 15 exclusion and the deduction-allocation ratio on Schedule A, so one wrong sourcing call propagates twice on the return.
Teams that move smoothly through American Samoa filings rarely solve it with more preparer hours. They solve it by front-loading the documentation work and giving every income item one definitive sourcing rule before it lands on the form.
- Capture Line 1 residency dates, the Line 6 absence table, and the Form 8898 trigger check at intake, not at review. The $1,000 per-failure Form 8898 penalty is the most expensive miss on this filing.
- Tag every wage entry on Line 7 by service location, not employer location, so federal U.S. Government pay and mainland service days never enter the exclusion.
- Run the Schedule SE check in parallel with Form 4563 for any self-employed client; the $400 SE-tax threshold applies even when the income is excluded under Form 4563 Rev. 9-2024.
- For military files, confirm SCRA sourcing for bona fide resident service members and the MSRRA carve-out for civilian spouses before Line 7 is finalized.
- For relocations during the year, complete the Pub. 570 chapter 1 year-of-move analysis before assuming a full-year exclusion is available.
We run this Form 4563 workflow inside firms and for direct filers across tax season: structured intake, documented sourcing rules, and a review pass before the exclusion is locked. See our taxation services for how the delivery is scoped.
FAQs
Do I still owe self‑employment tax if I exclude all my American Samoa–source net earnings
Yes, you may. The exclusion is for income tax on your U.S. return, not for self‑employment tax. If you are not otherwise required to file a U.S. return, file Form 1040‑SS to report and pay SE tax. Publication 570 explains the details and the limited deduction on Schedule 1 when only part of your income is excluded.
Can I exclude U.S. Government wages earned while living in American Samoa
No. Wages from the U.S. Government are not excludable on your U.S. return, even if you are a bona fide resident of American Samoa. Publication 570 also explains how those wages appear on both returns.
How do Form 4563 and Form 2555 interact
They address different things. Form 4563 is for American Samoa–source income when you are a bona fide resident under IRC 937, while Form 2555 is for the foreign earned income exclusion. Use the right form for the right rule set, and do not double count the same income. Publication 570 and the Form 4563 page make the scope clear.
I moved in or out midyear. Do I need Form 8898
Possibly. If your worldwide gross income for that year is more than $75,000 and you became or ceased to be a bona fide resident, the IRS says you must file Form 8898 for that year, with a $1,000 penalty for not filing when required.
What records should I keep to defend my presence test
Keep a daily location log, flight and boat itineraries, housing documents, voter registration, license and vehicle records, and any medical absence records that could count toward presence. Publication 570 and Treas. Reg. 1.937‑1 give examples and counting rules.
Why do people mention the $3,000 amount
It is part of one presence alternative. If your U.S. earned income is $3,000 or less and you spent more days in American Samoa than in the U.S., you can meet presence even if you did not hit 183 days, provided your tax home and closer connection are in American Samoa. The number comes from the regulation that references section 861.
What mailing address should I use if I paper file
Publication 570 lists the Austin, Texas address when no payment is enclosed and the Charlotte, North Carolina address when payment is enclosed. Always confirm the current year’s instructions before mailing, since addresses can change.