By Jason Watson (Google+)
ExPats qualify for foreign earned income exclusion and deductions under the physical presence test if they are physically present in a foreign country or countries for 330 full days during any rolling period of 12 consecutive months (330 days out of a rolling 365 days).
The physical presence test does not depend on the kind of residence you established, your intentions about returning, or the nature and purpose of your stay abroad. You can also count days you spent abroad for any reason. You do not have to be in a foreign country only for employment reasons- you can simply be living it up in the French Riviera with your favorite WCG (formerly Watson CPA Group) team member. But remember, the income must be earned (see What is considered foreign earned income?) while you are in a foreign country.
A full day is a period of 24 consecutive hours starting at midnight. Also, the time spent on or over international waters does not count towards the 330 days. Same with international airspace (see Tax Court Summary 2012-12).
So, how do partial years work? Good question. So Jameson hires you as a quality control consultant, and you report to Ireland on August 1 2014. You would be eligible for the foreign earned income exclusion 330 days later, or about July 1 2015. Your exclusion would be pro-rated based on the number of days of the tax year spent in a foreign country (see How do partial years work with the foreign earned income exclusion?).