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Notice 2018-44: Housing expense limit adjustments, foreign locations for 2018

Notice 2018-44: Housing expense limit adjustments

The IRS today released an advance version of Notice 2018-44 providing the adjustments to the limitation on housing expenses, under section 911, for specific locations for 2018.


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The adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States—thus, providing an increased amount that a qualified individual can elect to exclude from gross income as a housing cost amount for purposes of section 911.


Notice 2018-44 [PDF 127 KB] provides that under a general limitation, a qualified individual whose entire tax year is within the applicable period is limited to maximum housing expenses of $31,170 ($103,900 x .30) for 2018. A table is included with the adjusted limitations on housing expenses for certain foreign locations (in lieu of the otherwise applicable limitation of $31,170) for 2018.

Prior incorrect notice is withdrawn, replaced

In the Internal Revenue Bulletin (dated Monday, April 23, 2018), the IRS included Notice 2018-33. However, as noted in today’s release, that notice used an incorrect amount for the maximum foreign earned income exclusion to calculate the housing cost amount for 2018. Accordingly, today’s release—Notice 2018-44—provides the correct amount of the maximum housing expenses and the base housing amount for 2018. 

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