Ok, working for Emirates Airline means that you won't have the option to stay with US Social Security - though that's not a real problem.

If the employer is providing housing, yes you have to declare the value of it as income for the US tax return - but there is (on top of the overseas earned income exemption) a housing exclusion. (Explained in greater detail in pub 54.)

Now for the bad news <g> - they recently changed the tax calculation for those of us taking the overseas earned income exclusion. (Complicated it a bit, of course.) You have to take all your "usual" deductions against you whole worldwide income and then allocate them between the part of your income that is exempted (including the housing allowance) and the part that is left over.

Vastly simplified, if you made, say $100,000 and exempted the full $87,000 (forget the housing allowance for the moment), you'd calculate the tax on the $100,000 with all your usual deductions as if you were still back home. Then, you'd calculate the tax on the $87,000 with 87% of your usual deductions and allowances and subtract that from the tax on the full amount.

In practice it's a bit more complicated, and chances are you'll run up against the AMT (alternative minimum tax) calculation, too, in the process. But the net result is basically that you pay tax only on that $13,000 "excess" but at the rates for someone with $100,000 of income.

Again, that's only a very general overview of how it works. But to end on a positive note, no you shouldn't have to file a state return once you are resident overseas and qualify for the overseas earned income exemption (unless you have business interests of some sort back in the States that require you to file a state return on a non-resident basis).

It sounds horribly complicated, but once you go through the forms once or twice, they become fairly easy to fill out. Filing electronically may not be possible from overseas, due to the restrictions some of the software vendors put on their e-filing, but that's nothing you can't resolve with a postage stamp. Oh, and if you are resident overseas, you automatically get a two month extension for filing. Overseas returns are due June 15th each year. The first year is the killer because of the transition rules, but once you get through that it becomes much easier.
Cheers,
Bev