Notice 2016-21: Housing expense limit adjustments, foreign locations for 2016

IRS housing expense limits, foreign locations

The IRS today released an advance version of Notice 2016-21 providing the adjustments to the limitation on housing expenses, under section 911, for specific locations for 2016.

Related content

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 2016-21 [PDF 106 KB] provides a table with the adjusted limitations on housing expenses for the foreign locations (in lieu of the otherwise applicable limitation of $30,390) for 2016.

Election to apply 2016 adjusted limitations to 2015

Today's notice is effective for tax years beginning on or after January 1, 2016. 

For some locations, however, the limitation on housing expenses provided in today's notice may be greater than the limitation on housing expenses provided in the table of adjusted limitations for 2015 (as provided last year in Notice 2015-33). Accordingly, Notice 2016-21 provides that a qualified individual, incurring housing expenses in such a location during 2015, may elect to apply the 2016 adjusted housing limitations to the tax year beginning in 2015.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform