Attached is Notice 2017–21, which provides for adjustments to the limitation on housing expenses for purposed of section 911 of the Internal Revenue Code. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States. Further, if the limitation on housing expenses is higher for taxable year 2017 than the adjusted limitations on housing expenses provided in Notice 2016–21, qualified taxpayers may apply the adjusted limitations for taxable year 2017 to their 2016 taxable year.

Attached is Revenue Procedure 2017–27, which provides a waiver for the time requirements for individuals electing to exclude their foreign earned income who must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Rev. Proc. 2017–26 adds South Sudan for tax year 2016 for which the minimum time requirements are waived. Generally, U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income. However, if their tax home is in a foreign country and they meet either the bona fide residence test or the physical presence test, they can choose to exclude from their income a limited amount of their foreign earned income ($101,300 for 2016). Both the bona fide residence test and the physical presence test contain minimum time requirements.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for March 2017 used under § 417(e)(3)(D), the 24-month average segment rates applicable for March 2017, and the 30-year Treasury rates. These rates reflect the application of § 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112–141 (MAP-21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).