Yes - contractors can certainly qualify for the Foreign Earned Income Exclusion (FEIE). However, in general, the nature of contractor employment terms does not allow using the Bona Fide Residence Test. Therefore, civilian contractors working abroad are limited to the Physical Presence Test. Therefore you must closely track your time spent in the U.S. (whether for personal or business reasons) in order to secure the ability to exclude up to $100K from taxable income. Depending on your home state, you may also be able to exclude your earnings at the state level.