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Expatriation Tax: U.S. Taxes for Noncitizens (2025 IRS Guide)

This guide covers “Expatriation Tax” within u.s. taxes for noncitizens. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 519 (2025), U.S. Tax Guide for Aliens, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Expatriation Tax

The expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and LTRs who have ended their residency. The following section describes the expatriation rules under section 877A, which applies to individuals who expatriated on or after June 17, 2008. See Expatriation After June 16, 2008, later. If you expatriated before June 17, 2008, refer to Expatriation After June 3, 2004, and Before June 17, 2008 in chapter 4 of the 2018 Pub. 519, and the 2018 Instructions for Form 8854.

Caution:

If you renounced your citizenship or terminated your long-term residency after June 3, 2004, and before June 17, 2008, you will still be considered a U.S. citizen or a U.S. resident for tax purposes until you notify the Department of State or Department of Homeland Security (as applicable) of your expatriation and file Form 8854 with the IRS.

Long-term resident (LTR) defined.

See the definition of “LTR” under Who Must File in the Instructions for Form 8854.

Expatriation After June 16, 2008

Expatriation date.

Your expatriation date is the date you relinquish U.S. citizenship (in the case of a former citizen) or terminate your long-term residency (in the case of a former U.S. resident).

Former U.S. citizen.

To determine the expatriation date for a former U.S. citizen, see Date of relinquishment of U.S. citizenship in the Instructions for Form 8854.

Former LTR.

To determine the expatriation date for a former LTR, see Date of termination of long-term residency in the Instructions for Form 8854.

Covered expatriate.

If you expatriated after June 16, 2008, you are treated as a covered expatriate, and the expatriation rules under section 877A apply to you if you meet any of the following conditions.

  1. Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than $206,000 if you expatriated or terminated residency in 2025.

  2. Your net worth is $2 million or more on the date of your expatriation or termination of residency.

  3. You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.

Note:

If you are a covered expatriate and give a gift or bequest to a U.S. citizen or resident, they may be subject to the section 2801 tax. If you give a gift to a U.S. citizen or resident, you are presumed to be a covered expatriate for purposes of the section 2801 tax unless you authorize the disclosure of your relevant income tax return or income tax return information to the recipient of your gift. See section 2801 and What’s new—Estate and gift tax, available at IRS.gov/Businesses/Small-Businesses-Self-Employed/Whats-new-estate-and-gift-tax.

Relief procedures for certain former citizens.

If you were a U.S. citizen who expatriated after March 18, 2010, you may be eligible for certain relief procedures that provide an alternative means for satisfying the tax compliance certification process. For more information, see Relief Procedures for Certain Former Citizens, available at IRS.gov/Individuals/International-Taxpayers/Relief-Procedures-for-Certain-Former-Citizens.

Exception for dual-citizens and certain minors.

See Exception for dual-citizens and certain minors in the Instructions for Form 8854.

How To Figure the Expatriation Tax if You Are a Covered Expatriate

In the year you expatriate, you are subject to income tax on the net unrealized gain (or loss) in your property as if the property had been sold for its fair market value on the day before your expatriation date (“mark-to-market tax”). This applies to most types of property interests you held on the date of relinquishment of citizenship or termination of residency. For information on how to figure the expatriation tax if you are a covered expatriate, see Taxation Under Section 877A in the Instructions for Form 8854.

Expatriation Tax Return

You must file an initial Form 8854 in the year you relinquish your U.S. citizenship or terminate your long-term residency, even if you are not a covered expatriate. In addition, you must file a Form 8854 annually after you expatriate if you are a covered expatriate and you:

  1. Deferred the payment of mark-to-market tax (see Deferral of payment of mark-to-market tax, later),

  2. Have an item of eligible deferred compensation, or

  3. Have an interest in a non-grantor trust.

Deferral of payment of mark-to-market tax.

You can make an irrevocable election to defer the payment of the mark-to-market tax imposed on the deemed sale of property. For more information about the deferral of payment, see Deferral of the payment of mark-to-market tax in the Instructions for Form 8854.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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