SECTION 4. OPTION TO APPLY

2025 ADJUSTED HOUSING LIMITATIONS TO 2024 TAXABLE YEAR

For some locations, the limitation on housing expenses provided in Section 3 of this notice may be higher than the limitation on housing expenses provided in the “Table of Adjusted Limitations for 2024” in Notice 2024-31, 2024-15 I.R.B. 869. A qualified individual incurring housing expenses in such a location during 2024 may apply the adjusted limitation on housing expenses provided in Section 3 of this notice for 2025 (prorated over 366 days rather than 365) in lieu of the amounts provided in the “Table of Adjusted Limitations for 2024” in Notice 2024-31 (and as set forth in the Instructions to Form 2555, Foreign Earned Income, for 2024).

The Treasury Department and the IRS anticipate that future annual notices providing adjustments to housing expense limitations will make a similar option available to qualified individuals that incur housing expenses in the immediately preceding year. For example, when adjusted housing expense limitations for 2026 are issued, it is expected that taxpayers will be permitted to apply those adjusted limitations to the 2025 taxable year.