Dual U.S. Citizens and U.S. Expats Living Abroad

If an individual is a U.S. citizen, they are automatically considered a U.S. tax resident for federal income tax purposes under IRC Section 7701(a)(30)(A).

U.S. individual tax residents are generally required to file an annual Form 1040 (US Individual Income Tax Return) to report their gross income and pay federal income taxes.

A dual citizen living outside of the U.S. may question whether he is still U.S. tax resident or whether he is now a foreign person.

Form W-9 versus Form W-8BEN

The Form W-9 (Request for Taxpayer Identification Number and Certification) is primarily used by U.S. persons, including U.S. citizens, resident aliens, and certain types of domestic entities, who are required to provide their Taxpayer Identification Number (TIN) and certify their Chapter 3 tax classification for U.S. tax purposes.

A U.S. citizen’s status as a U.S. tax resident is NOT impacted by additional citizenships or residency in a foreign country. Once you become a U.S. citizen, you are a U.S. tax resident until you renounce your citizenship and leave the United States.

The Form W-8BEN (Certificate of Foreign Status for Individuals) is primarily used by individuals who are not U.S. tax residents. This includes individuals who are not U.S. citizens living outside the United States.

What’s An Example of Dual Citizenship

Frank Doe is both a U.S. and French citizen. Frank lives full-time in Paris, France. Frank goes to open a U.S. bank account, and the bank asks Frank to provide his passport and proof of residency. Frank provides his French passport and address in Paris.

The bank initially suggested that Frank complete Form W-8BEN because he is a foreign person. However, Frank remembers he is also a U.S. citizen with a U.S. passport. As a U.S. citizen, he is a U.S. tax resident regardless of French citizenship or residency in Paris. Frank must correct the bank by stating he needs to complete Form W-9 instead of Form W-8BEN.

What’s an Example for a U.S. Expat

A U.S. expatriate (or expat) is a U.S. citizen who lives outside of the United States for an extended period. Most expats move abroad for work, to travel the world, or to experience a different culture they were unable to find in the United States.

Despite living abroad, U.S. expats are generally still subject to U.S. tax laws, which include the requirement to file U.S. income tax returns, foreign bank account reporting, and reporting their foreign financial assets.

For example, Jane Smith is a U.S. citizen who lives and works in Miami as an accountant. Jane takes a new job with a finance company based in the Cayman Islands. Jane moved to Cayman on October 1, 2022, and anticipates spending at least two years on the island. When Jane opens her foreign bank accounts, she continues to provide a Form W-9 because she remains a U.S. tax resident even though she does not physically live in the United States.