What Is Expatriation?
Expatriation refers to the act of leaving a country of citizenship or residence, which United States tax law defines as relinquishing citizenship or long-term residence.
Also known as: Renunciation of Citizenship, Loss of Nationality.
How Expatriation works
Expatriation in the general sense covers any permanent move abroad, but in United States tax law expatriation occurs on a specific date, either when a citizen relinquishes citizenship or when a long-term resident ceases to be a lawful permanent resident, and that date starts the expatriation tax tests. A citizen is treated as relinquishing citizenship on the earliest of renunciation before a consular officer, a signed statement to the Department of State, a certificate of loss of nationality or a court cancelling naturalisation, with the first two events requiring later confirmation. A person becomes a covered expatriate by exceeding the average net income tax test, holding net worth of USD 2 million or more, or failing to certify five years of tax compliance on Form 8854. Covered expatriates face the mark-to-market regime of section 877A, subject to statutory exceptions.
Expatriation vs Expatriation Tax
Unlike Expatriation Tax, which is the charge applied to covered expatriates, Expatriation is the underlying act of giving up citizenship or long-term residence, which may or may not lead to any tax.
Example
Illustrative example: A dual national living in Country B renounces United States citizenship at a consulate, and the Department of State later issues a certificate of loss of nationality. The renunciation date becomes the expatriation date, and Form 8854 then shows whether the covered expatriate tests are met.
Common misconception
Myth: Renouncing United States citizenship immediately ends all United States tax filing duties.
Reality: Expatriates generally still file Form 8854 for the expatriation year, and covered expatriates may owe tax on gains deemed realised under section 877A.
Frequently asked questions
What is expatriation for US tax purposes?
For United States tax purposes, Expatriation is the relinquishment of citizenship or the end of lawful permanent residence by a long-term resident, effective on the expatriation date defined in Internal Revenue Code section 877A.
Does renouncing citizenship trigger the expatriation tax?
Renouncing citizenship triggers the United States expatriation tax only for covered expatriates, meaning individuals meeting the income tax test or the USD 2 million net worth test, or failing to certify compliance, subject to statutory exceptions.
Related terms
- Expatriation Tax — Most confused: the tax, not the act
- Covered Expatriate — Status deciding whether expatriation is taxed
- Expatriate — Person who has expatriated
- Citizenship-Based Taxation — Reason US citizens consider expatriation
- Exit Tax — Wider family of departure taxes
Related guides
- US expat tax reform debate — US expatriate tax reform context
- Global tax reform and US digital nomads — Tax context for US nomads abroad
Sources
Last verified: 2026-10-08. This entry is general information, not tax or legal advice; rules vary by country and change over time.
