The American Mariner Tax Fairness Act could create a special Foreign Earned Income Exclusion pathway for certain U.S. merchant mariners. The proposal is potentially valuable—but considerably narrower than its name may suggest.
As introduced, H.R. 10153 would focus on qualifying service aboard certain large U.S.-flag vessels engaged in U.S. foreign trade. Most Americans working aboard private or charter yachts would remain outside the proposed special rule and would still need to analyze Section 911 under existing law.
Current-law warningH.R. 10153 is proposed legislation, not a tax benefit available today. Mariners should not claim its proposed treatment unless Congress enacts it and the provision becomes effective.
What is the American Mariner Tax Fairness Act?
H.R. 10153 was introduced in the House on August 27, 2026. The bipartisan proposal would amend Internal Revenue Code Section 911 for a defined group of U.S. citizens and residents actively employed aboard qualifying vessels in U.S. foreign trade.
Under the text described in the proposal, an eligible mariner generally would need at least 90 full days of qualifying service during a period of 12 consecutive months. This would address a longstanding mismatch between work performed at sea and the geographic tests that apply under current FEIE rules.
90 proposed full service days in a 12-month period 6,000+ deadweight tons in the proposed vessel definition $132,900 2026 maximum FEIE stated in the supplied analysis
Why mariners have an FEIE problem under current law
Current Section 911 generally requires foreign earned income, a tax home in a foreign country and satisfaction of either the bona fide residence test or physical presence test. The physical presence test generally requires 330 full days in one or more foreign countries during a consecutive 12-month period.
International waters matterTime outside the United States is not automatically time in a foreign country. Days spent in international waters generally do not count as foreign-country days for the physical presence test.
For example, a crew member might spend 300 days aboard a vessel, 40 days in foreign countries and 25 days in the United States. Although the person was outside the United States for 340 days, vessel time in international waters cannot simply be counted as foreign-country presence.
What H.R. 10153 would change
The proposal would provide an alternative pathway for qualifying merchant mariners based on service aboard a qualifying vessel. The proposed 90-day standard is fundamentally different from treating every day at sea as a foreign-country day under the existing physical presence test.
The special rule would not erase every tax or reporting obligation. FEIE is an income exclusion subject to limitations and special computation rules. State tax, payroll tax, self-employment tax and information-reporting consequences may remain depending on the facts.
Which vessels would qualify?
As described in the introduced bill, a qualifying vessel generally must be U.S.-flagged, at least 6,000 deadweight tons, self-propelled or part of a qualifying combination, and used exclusively in United States foreign trade. Those requirements point to large commercial merchant vessels—not the typical yacht.
| Worker or vessel | Proposed treatment |
|---|---|
| U.S. merchant mariner on a qualifying 6,000+ DWT U.S.-flag vessel | Potentially eligible if every requirement is met |
| American crew on a Cayman- or Marshall Islands-flag yacht | Generally outside the proposed special rule |
| American crew on a smaller U.S.-flag yacht | Generally outside the proposed special rule |
| Yacht crew genuinely living and working abroad | May still qualify under existing FEIE rules |
| Crew spending most of the year in international waters | Current international-waters issue may remain |
Does the proposal apply to yacht crew?
For most yacht crew, no—not as currently described. A U.S. captain on a 60-meter foreign-flag yacht does not become eligible merely by working internationally, receiving foreign payroll or spending most of the year outside the United States. The vessel itself generally would not meet the proposed definition.
That does not necessarily prevent the captain from qualifying under existing FEIE law. The analysis instead returns to tax home, bona fide residence, actual foreign-country presence and the source and nature of the income. MFS guidance for yacht tax advisory and yachting accountants explains why vessel movements and contemporaneous records matter.
Six questions yacht crew should analyze
- Where is the tax home? Establish the taxpayer’s regular place of business and relevant personal ties.
- Where were full days spent? Separate foreign-country, U.S. and travel days.
- How many days were in international waters? Do not treat them automatically as foreign-country days.
- Was bona fide residence established? International travel alone is not foreign residence.
- What is the vessel and employment structure? Document flag, employer, contracts and service locations.
- Which state claims residency? Federal exclusion eligibility does not settle state taxation.
How valuable could the proposal be?
The potential benefit depends on qualifying compensation, service periods, filing status, other income, deductions, credits, and the final enacted language. The FEIE stacking rule also affects the rate applied to income remaining after an exclusion.
| Illustrative wages | Tax without FEIE | Tax after assumed FEIE | Illustrative difference |
|---|---|---|---|
| $80,000 | $8,770 | $0 | $8,770 |
| $120,000 | $17,570 | $0 | $17,570 |
| $180,000 | $31,934 | Approximately $7,440 | Approximately $24,494 |
These simplified figures are supplied illustrations, not projections for any taxpayer. They exclude state tax, payroll and self-employment tax and assume facts that may not apply. “Ninety days at sea means no tax” is not an accurate description of the bill.
Has the bill become law?
No. As of September 2026, the supplied legislative history identifies H.R. 10153 as introduced in the 119th Congress and referred to the House Committee on Ways and Means. Congress must pass legislation and the President must sign it before it changes federal tax law.
The introduced language would apply to taxable years beginning after enactment. Until then, taxpayers must apply existing law. Track the official status and text through Congress.gov’s H.R. 10153 page and review IRS FEIE guidance .
What should mariners document now?
- Identify the vessel. Retain its full name, flag and specifications.
- Preserve employment evidence. Keep contracts, employer details, pay records and service dates.
- Maintain a daily location log. Separate U.S., foreign-country, territorial-water and international-water days.
- Trace compensation. Allocate pay to relevant contracts and service periods.
- Document the tax home. Preserve housing, residency, travel and business records.
- Monitor the legislation. Rely on enacted text and effective dates—not summaries or headlines.
Review before filingMcGregor Financial Services assists yacht crew, merchant mariners and internationally mobile professionals with U.S. maritime tax questions. Schedule a consultation to review vessel movements, tax home, residence and employment facts.