A bill to amend the Internal Revenue Code of 1954 with respect to the tax treatment of earned income of United States citizens and resident aliens from sources without the United States, and for other purposes.

Amends the Internal Revenue Code to extend to all residents of the United States the same general exclusion of income earned abroad that is presently limited to citizens. Repeals the disallowance of an income tax credit for foreign taxes paid on income items that are excluded as foreign earned income. Increases the limitations on this exclusion, with provisions for annual adjustments by the Secretary of the Treasury to correspond to rate increases paid to GS-12, step one government employees.

Allows a new income tax deduction for the sum of foreign source income related expenses falling in the following categories: the cost-of-living differential (i.e., the excess cost) of maintaining a family in a foreign country rather than the United States (to be governed by tables published by the Secretary of the Treasury, guided by the State Department's index of foreign living costs); a portion of the excess housing costs experienced abroad the elementary and secondary education expenses of the taxpayer's dependents, including room, board and travel if no adequate "United States-type" schools are available; travel expenses of one annual trip home; and reasonable transportation expenses for the taxpayer and his family for travel between remote or adverse posts and any other location approved by the employer. Allows taxpayers to use deduction for determining adjusted gross income, thereby extending it to individuals not itemizing their deductions. Limits deducting any expense item to one of the specified categories of this deduction, thereby avoiding multiple deductions of single expenses. Includes in gross income any reimbursement by an employer for expenses qualifying for this deduction.

Increases the time and amount limitations for moving expense deductions in the cases of all international moves resulting from death of the taxpayer, retirement, or a new principal place of work. Includes the storage fees incurred for the duration of a foreign assignment within the expenses qualifying for this deduction.

Excludes from gross income all meals and lodging furnished the taxpayer and his dependents by his employer outside the United States in a "camp-style" or communal setting.

Provides taxpayers working abroad the same extended repurchase time limitations as are presently provided servicemen stationed overseas for the nonrecognition of gain on the sale or exchange of a principal residence.