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Foreign Earned Income Exclusion at the state level

Here is a lesser know aspect about the Foreign Earned Income Exclusion (FEIE):



While the FEIE is well known as a federal tax exclusion, (up to $126,000 for 2024) it may also be used on the state level for certain states.



It can cause you to be exempt from state taxes, even if that state would normally tax that income earned while living abroad as state source income. 



But some states don't honor this. 



For instance, while NJ honors it, NY does not.



Here is a helpful map to visualize which states honor it and which don't.



 
 
 

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