Moving does not end your US filing obligation. “If you are a U.S. citizen or resident alien, your worldwide income is generally subject to U.S. income tax, regardless of where you are living” (IRS Publication 54, continuous-use revision December 2025, checked 2026-08-26). Your passport sets the rule, not your address. This is general information, not tax advice, and every figure below carries its government source and the date checked.
The deadline you actually get
File on a calendar year from abroad and the extension is automatic. The IRS: “the regular due date of your return is April 15, and the automatic extended due date would be June 15.” Form 4868 takes it to October 15, and a discretionary further 2 months to December 15 can be requested (Publication 54). None of it extends the time to pay: “you will have to pay interest on any tax not paid by the regular due date.”
Two levers, and the one you pick affects your children
The foreign earned income exclusion is $130,000 for tax year 2025 (Instructions for Form 2555 (2025)) and $132,900 for tax year 2026 (Revenue Procedure 2025-32, section 3.39). Claim it on Form 2555. It needs a tax home in a foreign country plus one of two tests:
- Bona fide residence test. You are “a bona fide resident of a foreign country, or countries, for an uninterrupted period that includes an entire tax year.”
- Physical presence test. You are “physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row.”
Elect it once and it stays elected until you revoke it, and revoking locks you out “for your next 5 tax years without the approval of the IRS.”
The foreign tax credit is the other lever, claimed on Form 1116. The IRS: “In most cases, it is to your advantage to take foreign income taxes as a tax credit.” You cannot run both on the same income: “if you elect to exclude either foreign earned income or foreign housing costs, you cannot take a foreign tax credit for taxes on income you exclude.”
The usual reason families pick one: if your new country taxes your salary at a higher effective rate than the US does, the credit tends to cover the US bill. If local tax is low, the exclusion does more work. With children, a third factor decides it.
The child tax credit trap
For tax year 2025 the child tax credit is “worth up to $2,200 per qualifying child,” with a refundable additional child tax credit of “up to $1,700 per qualifying child depending on your income” (IRS). Revenue Procedure 2025-32 holds both at $2,200 and $1,700 for tax year 2026.
Instructions for Form 2555 (2025): “You can’t take the additional child tax credit if you claim either of the exclusions or the housing deduction.” The Instructions for Schedule 8812 (2025) say the same, and the election also blocks the earned income credit.
A family with modest US tax liability can therefore exclude its income, owe nothing, and receive nothing back, where a family running the foreign tax credit may still reach the refundable portion.
To claim the credit, you and “each qualifying child must have a Social Security number that is valid for employment in the United States and issued before the due date of the tax return (including extensions),” and the child must “be under 17 at the end of the tax year.” An SSN that arrives after your deadline does not count for that year.
FBAR goes to FinCEN, not the IRS
The threshold is measured at a peak, not at year end. Per FinCEN, a US person must file “if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.” A rent deposit plus a local salary account clears it.
You file FinCEN Form 114 electronically through the BSA E-Filing System. The IRS: “You don’t file the FBAR with your federal tax return.” It is due April 15, with an automatic extension to October 15 that you “don’t need to request.”
Your child’s account counts on its own. “Generally, a child is responsible for filing his or her own FBAR report. If a child cannot file his or her own FBAR for any reason, such as age, the child’s parent, guardian, or other legally responsible person must file it for the child” (FinCEN). A parent signing enters “Parent/Guardian filing for child” in item 45 of the form.
Form 8938 thresholds are higher when you live abroad
Form 8938 is a separate FATCA filing that rides with your return. Abroad, the thresholds are more than $200,000 on the last day of the year or more than $300,000 at any point in it, for unmarried filers and married filing separately, and more than $400,000 or $600,000 for married filing jointly. Living in the US: $50,000, $75,000, $100,000 and $150,000.
The IRS defines living abroad here as a foreign tax home plus presence there “for at least 330 days out of a consecutive 12-month period.” Clearing one filing does not clear the other: “Form 8938 does not relieve filers of FBAR filing requirements.”
Your old state may still count you as a resident
Leaving the country does not end state residency. Two states, in their own words:
California. The Franchise Tax Board makes you a resident if you are “Domiciled in California, but outside California for a temporary or transitory purpose.” Domicile is where “you voluntarily establish yourself and family… with a present intention of making it your true, fixed, permanent home,” and “Once you acquire a domicile, you retain that domicile until you acquire another” (FTB Publication 1031, 2025). The safe harbor is narrow: someone domiciled in California but outside it “under an employment-related contract for an uninterrupted period of at least 546 consecutive days” is a nonresident, unless intangible income exceeds $200,000 in a year the contract runs or the absence is principally to avoid tax. Because it turns on an employment contract, a family moving on passive income or self-employment does not get it.
New York. “You can only have one domicile. Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State.” There is a route out for the still-domiciled: at least 450 days “in a foreign country” during any 548 consecutive days, with you, your spouse and minor children spending “90 days or less in New York State” in that period, plus a proration test on partial years (updated 2025-05-06).
Social Security, self-employment tax, and totalization
The exclusion does not touch self-employment tax. You “must take all your self-employment income into account… even if all, or a portion of, gross income was excluded because of the foreign earned income exclusion.”
A totalization agreement is what stops you paying twice. Per SSA, the agreements “eliminate dual social security coverage and taxation,” and separately let workers who “divided their careers between the United States and a foreign country” qualify for partial benefits on credits in both. You claim the exemption with a certificate of coverage from the foreign agency, a photocopy of which the IRS wants attached to your Form 1040 each year.
Six of the eight destinations this site covers have one in force, at SSA’s effective dates: Italy (1978-11-01), Spain (1988-04-01), France (1988-07-01), Portugal (1989-08-01), Netherlands (1990-11-01), Ireland (1993-09-01). Mexico and Costa Rica do not appear on SSA’s list of agreements in force (SSA POMS GN 01701.005, read 2026-08-26). If you are self-employed and move to either, plan on paying into both systems.
A child born abroad
Apply for a Consular Report of Birth Abroad. The fee is $100, item 7 of the Schedule of Fees for Consular Services (22 CFR 22.1, 2025 CFR edition, revised as of April 1, 2025).
What the CRBA buys is documentary proof of citizenship. Under 22 USC 2705, a Report of Birth Abroad issued by a consular officer “shall have the same force and effect as proof of United States citizenship as certificates of naturalization or of citizenship.” Start early: the child tax credit turns on an SSN issued before your filing deadline, and citizenship documentation sits upstream.
Who should not
Families who expect this page to replace a preparer. Every rule above has exceptions this format cannot carry. We are paid when you engage a tax preparer through this site, and that payment changes nothing on this page, where every figure and rule is quoted from the government source listed with it.
Anyone with a foreign trust, a foreign corporation, or PFIC exposure. A foreign trust pulls in Form 3520; a foreign corporation pulls in Form 5471, for US “officers, directors, or shareholders in certain foreign corporations.”
The PFIC is the one that catches ordinary families. A foreign corporation is a PFIC if “75% or more of the corporation’s gross income for its tax year is passive income” or “at least 50% of the average percentage of assets” it holds produce or are held to produce passive income (Instructions for Form 8621, Rev. December 2025). A non-US mutual fund or ETF bought from a local bank routinely meets that, and so can many non-US pension and insurance wrappers. Reporting runs on Form 8621, and the treatment is punitive when handled wrongly. If any of the three describes you, price a preparer who states in writing that they handle that form.