US Exit Tax for Covered Expatriates: What NRIs Must Know Before Renouncing or Abandoning a Green Card

A software engineer at a Bay Area company, Indian citizen, has held a Green Card for eleven years. She is moving back to Bengaluru permanently. Her Silicon Valley home has appreciated by over USD 2 million since she bought it in 2015. Her traditional IRA holds USD 420,000. She knows she will need to file some paperwork to formally give up her Green Card, but she has not considered that the US has an exit tax regime that could cost her more than USD 280,000 before she boards the flight home, and that every 401(k) and IRA distribution she draws for the rest of her life will be taxed at 30% with no treaty benefit, regardless of what the India-US DTAA says.

This is not a theoretical risk. It is a live statutory obligation under IRC Section 877A, and it applies the moment you become what the code calls a "covered expatriate."

The 30-second answer: The US exit tax under IRC Section 877A applies to US citizens who renounce citizenship and to Green Card holders who were lawful permanent residents for at least 8 of the 15 tax years ending with the year they expatriate. If you fall into either category and meet at least one of three tests (net worth of USD 2,000,000 or more; average annual US income tax liability for the prior 5 years of USD 201,000 or more (2024); or failure to certify 5-year compliance on Form 8854), you are a "covered expatriate." All worldwide assets are deemed sold at fair market value the day before expatriation. Net gains above a USD 866,000 exclusion (2024) are taxed at capital gains rates. IRAs and 401(k)s escape the deemed sale but face 30% lifetime withholding on all future distributions, with no treaty protection. Form 8854 must be filed with your final US return; failure to file makes you a covered expatriate automatically.

This guide covers who the rules apply to, how covered expatriate status is determined, the exact mechanics of the exit tax calculation, the retirement account trap, the Reed Amendment, Form 8854 obligations, planning strategies that genuinely work, and post-expatriation rules that follow covered expatriates even after they leave. Two worked examples run the numbers for someone well below the threshold and someone well above it.

The two categories of person subject to exit tax

Exit tax applies to two groups.

The first is US citizens who formally renounce citizenship. Renunciation requires an oath of renunciation before a US consular officer at a US Embassy or Consulate. You cannot renounce inside the United States. The expatriation date for a citizen is the date you take the oath at the consulate.

The second is long-term permanent residents (LPRs) who abandon their Green Card. Not every Green Card holder who leaves qualifies. You are a long-term resident only if you held a Green Card and were a lawful permanent resident for at least 8 of the 15 tax years ending with the year of expatriation. The count is tax years, not calendar years or years from the date the card was issued.

For Green Card abandonment, the expatriation date is the earlier of the date the Form I-407 (Record of Abandonment) is filed with a US consular officer or the date a court order terminating residency becomes final.

The 8-year rule is the most important dividing line many NRIs do not know. If you are a Green Card holder who intends to return to India and you have not yet completed 8 years as a lawful permanent resident, you can abandon your card before crossing that line and exit tax rules will not apply to you at all. You are simply a non-long-term resident abandoning residency, with no IRC Section 877A obligations. This is the cleanest and most powerful exit tax planning strategy available, and it requires knowing your count carefully.

A person who lets their Green Card expire, moves back to India, and ignores the whole thing has not formally expatriated and is not off the hook. The IRS takes the position that a Green Card holder who has not formally abandoned is still a lawful permanent resident for tax purposes regardless of where they physically live. The I-407 or the consular renunciation is the formal act. Until that happens, worldwide income remains taxable as a US resident.

The three tests: how covered expatriate status is determined

Being a long-term resident or a US citizen who expatriates does not automatically trigger exit tax. You become a covered expatriate only if you satisfy at least one of three tests as of the date of expatriation.

Test 1: The net worth test

Your net worth is USD 2,000,000 or more on the date of expatriation. Net worth means all worldwide assets at fair market value, minus all liabilities. This is not limited to US assets. It includes:

• US real estate, US brokerage and bank accounts, US retirement accounts (at current value)
• Indian real estate (valued at current market rates, converted to USD)
• Indian mutual funds, fixed deposits, NRE and NRO account balances
• Business interests, jewellery, vehicles, and any other property

The USD 2,000,000 threshold has not been indexed for inflation since the rule was introduced in 2004. Two million dollars in 2004 had significantly more purchasing power than it does today. With substantial Indian real estate appreciation over the past decade and rising US brokerage balances, many NRIs who would have comfortably cleared this threshold five years ago are now sitting much closer to USD 2 million than they realise. A family flat in Mumbai or Bengaluru purchased two decades ago can alone push the calculation toward the limit.

Test 2: The average annual net income tax liability test

Your average annual US net income tax liability for the 5 tax years ending before the date of expatriation is USD 201,000 or more (2024 figure; this amount is indexed annually for inflation). This is the actual federal income tax paid, not gross income. High-earning professionals in Silicon Valley, New York, or Seattle who have been paying USD 200,000 or more in federal tax each year for the past 5 years will trigger this test.

Calculate this by adding your net income tax (after credits) from Forms 1040 for the 5 preceding years and dividing by 5. If the average exceeds USD 201,000, you have triggered the test.

Test 3: The certification failure test

You cannot, or do not, certify on Form 8854 that you have complied with all US federal tax obligations for the 5 preceding tax years. This test operates as a default and as a compliance trap. Someone who has genuinely filed and paid correctly for 5 years can certify and clear this test. But several common NRI situations break that 5-year compliance record:

• Failure to file Form 3520 to report gifts or bequests received from foreign persons (including gifts from Indian parents above the threshold)
• Failure to file Form 8621 for each passive foreign investment company (PFIC), which in practice means any Indian mutual fund, most Indian ULIPs, and some offshore investment structures
• Late or missed FBAR (FinCEN 114) filings for Indian bank accounts exceeding USD 10,000 in aggregate
• Failure to file Form 8938 (FATCA) for foreign financial assets above the applicable threshold
• Missing the 5-year period for catch-up filings if you entered the streamlined compliance programme

Failure to file Form 8854 at all makes you a covered expatriate automatically, regardless of your actual net worth or tax history, and triggers a USD 10,000 penalty on top of that. This is not an obscure technicality. People who leave the US without professional tax guidance frequently miss Form 8854 because they do not know it exists.

The mark-to-market exit tax: how the calculation works

If you are a covered expatriate, IRC Section 877A applies the following rule: all property you own worldwide is treated as if sold at fair market value on the day before your expatriation date. This deemed sale is not optional and is not a cash event. You owe real tax on the calculated gain even though no sale actually occurred and you received no proceeds.

The calculation runs as follows:

1. For each asset you own on the expatriation date, determine the fair market value.
2. Subtract your adjusted cost basis in each asset (original purchase price plus improvements and adjustments).
3. Sum all gains across all assets.
4. Offset with any losses (subject to wash sale and other limitations).
5. From the net gain, subtract the exclusion amount of USD 866,000 (2024 figure, adjusted annually by CPI).
6. Tax the remaining net gain at applicable rates: long-term capital gains rates (15% or 20% for most taxpayers, plus 3.8% net investment income tax) for assets held more than one year, ordinary income rates (up to 37%) for those held one year or less.

The USD 866,000 exclusion applies to the total net gain across all assets, not asset by asset. If your total unrealised gain on the deemed sale is below USD 866,000, you owe no exit tax on the deemed sale even as a covered expatriate. You are still a covered expatriate with all that status entails, including the retirement account consequences described below, but the immediate exit tax bill on the deemed sale is zero.

Indian real estate presents a valuation challenge. You need the fair market value on the date of expatriation in USD. A registered valuation from a local valuer and a credible exchange rate from the RBI or a reputable source on that date will form the basis. The IRS can challenge an unreasonably low valuation. Under-valuing to reduce the deemed gain is a compliance risk, not a planning strategy.

The retirement account trap: deferred compensation after expatriation

This is the consequence of covered expatriate status that is often more costly over a lifetime than the deemed sale, and it is the one most professional advisers fail to emphasise clearly enough.

Traditional IRAs, 401(k) plans, 403(b) plans, and other deferred compensation arrangements are not subject to the mark-to-market deemed sale. They are excluded. This sounds like good news. It is not, because IRC Section 877A(d) replaces the mark-to-market regime for these accounts with a different and often worse outcome.

Under Section 877A(d), distributions from these accounts to a covered expatriate after the expatriation date are subject to 30% US withholding as income paid to a non-resident alien. This applies regardless of any tax treaty.

For a non-covered NRI who has left the US and returned to India, the India-US DTAA Article 20 provides that private pension distributions are taxable only in the country of residence. An Indian resident drawing down a 401(k) can argue for reduced or zero US withholding under the treaty. That argument is cut off for a covered expatriate. IRC Section 877A(d)(4) specifically eliminates treaty benefits on deferred compensation for covered expatriates. The 30% withholding applies, full stop.

Put real numbers on this. A covered expatriate has a Traditional IRA worth USD 420,000. If she draws it down over 15 years from India, USD 420,000 in gross distributions will generate USD 126,000 in US withholding, irrecoverable through any treaty claim. A non-covered NRI in the identical position might pay effectively zero US withholding under the treaty and pay India slab rates on the distributions, potentially a much lower effective rate. The cost of covered expatriate status on the retirement account alone, in this example, is USD 126,000.

Roth IRAs are treated differently but only partially better. Roth contributions were made with after-tax dollars, so qualified distributions are US-tax-free for US persons. But for a covered expatriate, the same 30% withholding applies to Roth distributions. The one exception: if you converted your Traditional IRA to a Roth before your expatriation date and paid income tax on the conversion, the Roth is no longer a "deferred compensation item" under Section 877A(d). Roth qualified distributions after expatriation are not subject to the 30% withholding. This distinction drives one of the most important planning strategies discussed below.

Form 8854: the filing that controls everything

Form 8854 (Initial and Annual Expatriation Statement) is the form that governs your exit tax obligations. Missing it is not a minor administrative lapse.

Form 8854 must be filed for the tax year in which you expatriate, attached to the US return for that year (Form 1040 if you are a resident for part of the year, Form 1040-NR for the non-resident period, or a dual-status return).

The deadline is the due date of that return, April 15 of the year following expatriation, or October 15 with an extension.

On Form 8854 you:

• Certify that you have complied with all US federal tax obligations for the preceding 5 years
• Report the deemed sale of all worldwide property
• Calculate the exit tax on net deemed-sale gains above the exclusion
• Report deferred compensation items

Failure to file Form 8854 results in two automatic consequences: covered expatriate status regardless of your actual situation, and a civil penalty of USD 10,000. There is no grace period and no reasonable cause exception to the automatic covered-expatriate designation.

The year of expatriation is a dual-status tax year. From January 1 through the day before expatriation you are a US resident and report worldwide income. From the expatriation date onward you are a non-resident alien and report only US-source income. Two sets of rules apply within a single calendar year. The return is more complex than a standard 1040, and the rules for what income is included in each period require careful attention. This is not a return to file without a US CPA specialising in expatriation.

The Reed Amendment: a re-entry risk for citizenship renouncers

The Reed Amendment, codified at 8 USC 1182(a)(10)(E), provides that a former US citizen whom the Attorney General determines to have renounced citizenship for the purpose of avoiding taxation may be inadmissible to the United States. Inadmissibility means denial of entry, potentially permanently.

This provision is rarely enforced in practice. The IRS does not automatically refer renouncers to the Attorney General, and there is no bright-line rule on what constitutes renunciation for tax avoidance. The practical risk is low but non-zero, particularly for someone whose renunciation coincides with a large taxable event, whose public statements suggest tax motivation, or whose exit planning is aggressive enough to draw scrutiny.

Two important limits on the Reed Amendment: it applies only to citizenship renunciation, not to Green Card abandonment. And it is a discretionary determination, not an automatic bar. But it creates a category of legal risk that the mark-to-market rules do not, and it is worth knowing before you take the oath of renunciation.

Worked example 1: Below the threshold, no exit tax

Rajan is 44 years old, Indian citizen, has held a Green Card for 6 years and decides to return to India permanently. His worldwide assets:

• US 401(k): USD 280,000 (fair market value; all pre-tax contributions)
• US brokerage account: USD 190,000 (cost basis USD 145,000; unrealised gain USD 45,000)
• India flat in Pune: purchased for Rs 1,20,00,000 (Rs 1.2 crore) in 2016, current value Rs 2,50,00,000 (Rs 2.5 crore); at Rs 83 per dollar, current value approximately USD 301,200; cost basis approximately USD 144,578
• India savings and NRE/NRO accounts: USD 79,000

Total assets at fair market value: USD 280,000 + USD 190,000 + USD 301,200 + USD 79,000 = USD 850,200. No significant liabilities. Net worth: approximately USD 850,200.

Net worth test: does not trigger (below USD 2,000,000).

Average annual US federal income tax for past 5 years: USD 55,000 per year. Average annual liability test: does not trigger (below USD 201,000).

He files Form 8854, certifies compliance for the prior 5 years, and clears the certification test.

Result: Rajan is not a covered expatriate. No exit tax applies. His obligations are to file Form I-407 to formally abandon the Green Card, file a dual-status return for the year of departure, file Form 8854 attached to that return, and report the year's income correctly under dual-status rules. No deemed sale, no 30% withholding on future 401(k) distributions (he can claim treaty protection), no exit tax bill.

The key fact here: 6 years of LPR status. Had Rajan been approaching the 8-year mark and planning to go, filing the I-407 before completing the 8th year would have put him in this same position deliberately, even with a much higher net worth.

Worked example 2: Over the threshold, significant exit tax

Priya is 52 years old, US citizen (not a Green Card holder; she naturalised 8 years ago). She is married to an Indian national who is not a US citizen or resident. She is moving back to Bangalore permanently and plans to renounce her US citizenship at the US Consulate.

Her worldwide assets:

• Silicon Valley home: purchased in 2012 for USD 800,000, current fair market value USD 2,800,000; mortgage outstanding USD 400,000; net equity USD 2,400,000
• US equity portfolio (individual stocks, taxable brokerage account): USD 650,000, cost basis USD 350,000, unrealised gain USD 300,000
• Roth IRA: USD 180,000 (contributed post-tax; fully qualified)
• Traditional IRA: USD 420,000 (all pre-tax)
• India residential property: USD 200,000 (inherited; basis is the estate value at date of inheritance)
• India listed mutual funds (PFIC): USD 80,000 (cost basis USD 50,000, unrealised gain USD 30,000)

Net worth calculation: USD 2,800,000 + USD 650,000 + USD 180,000 + USD 420,000 + USD 200,000 + USD 80,000 minus USD 400,000 mortgage = USD 3,930,000.

Net worth test: triggered. She is a covered expatriate.

Mark-to-market deemed sale calculation:

The home: gain is USD 2,800,000 minus USD 800,000 = USD 2,000,000. The Section 121 principal residence exclusion normally exempts USD 500,000 of gain for a married couple filing jointly. However, Priya's spouse is not a US citizen or resident, so the joint exclusion is not available. She qualifies for the single exclusion of USD 250,000. Net taxable gain on the home: USD 2,000,000 minus USD 250,000 = USD 1,750,000.

The equity portfolio: unrealised gain USD 300,000.

The India property: inherited basis of USD 150,000 assumed; current value USD 200,000; gain USD 50,000.

The India mutual funds (PFICs): unrealised gain USD 30,000.

The Roth IRA and the Traditional IRA are excluded from mark-to-market (deferred compensation items under Section 877A(d)).

Total deemed-sale gains: USD 1,750,000 + USD 300,000 + USD 50,000 + USD 30,000 = USD 2,130,000.

Subtract the 2024 exclusion of USD 866,000.

Taxable gain: USD 2,130,000 minus USD 866,000 = USD 1,264,000.

All assets held more than one year: long-term capital gains rates apply. At Priya's income level, 20% federal LTCG rate plus 3.8% net investment income tax = 23.8%.

Exit tax on deemed sale: USD 1,264,000 x 23.8% = approximately USD 300,832.

Additionally, her Traditional IRA of USD 420,000 will be subject to 30% withholding on every future distribution, with no treaty relief. If she draws down the IRA over 20 years in India, approximately USD 126,000 of that USD 420,000 will go to the IRS as withholding, irrespective of what any India-US DTAA provision would otherwise allow.

Total exit tax impact: approximately USD 300,832 on the deemed sale, plus the permanent loss of treaty protection on USD 420,000 of IRA value, a combined lifetime cost well above USD 400,000.

Planning note: had Priya renounced when her Silicon Valley home was worth USD 1,500,000 rather than USD 2,800,000, her net worth would have been approximately USD 2,530,000, still above the USD 2 million threshold, but her total deemed-sale gain would have been substantially lower. Had she converted the Traditional IRA to Roth before renouncing, future distributions would not be subject to the 30% withholding.

Planning strategies that reduce or eliminate exit tax

Strategy 1: Abandon the Green Card before the 8-year mark

This is the most powerful strategy and requires no complex transactions. If you hold a Green Card, count your years of LPR status carefully. If you have not yet completed 8 tax years as a lawful permanent resident, filing Form I-407 before the 8-year anniversary removes you from the long-term resident category entirely. Exit tax rules do not apply to you. This is the cleanest exit available and costs nothing beyond professional advice to get the timing right.

The count is tax years as an LPR, not the anniversary of the card issue. Get advice from a US immigration attorney alongside your CPA because the definition of a "tax year as an LPR" can turn on facts about when you first entered as an LPR and how the IRS and USCIS count overlapping periods.

Strategy 2: Roth conversion before expatriation

If you have a Traditional IRA or pre-tax 401(k) balance and you are planning to expatriate in the next 2 to 5 years, model a Roth conversion strategy. Converting a Traditional IRA to a Roth IRA while you are still a US resident means paying income tax on the converted amount in the year of conversion, at ordinary income rates. After the conversion, the Roth IRA is no longer a "deferred compensation item" for Section 877A(d) purposes. Qualified Roth distributions after expatriation are not subject to the 30% NRA withholding.

The trade-off is real: you pay income tax today at potentially 32% to 37% on the converted amount to avoid 30% withholding on future distributions. The breakeven depends on the size of the balance, your current marginal rate, your expected future tax rate in India, and how many years of distributions you expect to take. For large balances (above USD 200,000), the calculation is worth modelling with a CPA before you expatriate. A partial Roth conversion, converting just enough each year to fill up a lower marginal bracket, can reduce the current tax cost while still shrinking the deferred compensation exposure before expatriation.

Strategy 3: Gift appreciated assets to a US-citizen spouse before expatriation

If your spouse is a US citizen, the unlimited marital deduction means you can transfer appreciated assets to your spouse before expatriation with no gift tax consequence. Those assets are removed from your net worth for the exit tax calculation. If your net worth is, say, USD 2,300,000 and you transfer USD 400,000 of US equities to your US-citizen spouse before the expatriation date, your net worth at expatriation falls below USD 2,000,000 and the net worth test does not trigger.

This strategy does not work if your spouse is not a US citizen. Gifts to a non-US-citizen spouse are limited to USD 185,000 per year (2024 annual exclusion for spouses who are not US citizens; indexed annually). Gifts above that limit are subject to federal gift tax at rates up to 40%. Gifts to children or other persons are subject to a general annual exclusion of USD 18,000 per donee; amounts above that require using lifetime exemption or paying gift tax.

Strategy 4: Sell appreciated US assets before expatriation while still a resident

Counterintuitive but sometimes optimal. If you sell appreciated assets before your expatriation date, you are taxed as a US resident on the gain: 15% or 20% long-term capital gains plus 3.8% NIIT. The assets now have a stepped-up basis at their sale price. When you then expatriate, the mark-to-market deemed sale applies to these assets at their new basis, generating little or no additional gain.

The advantage is control: you choose when in the year to realise the gain, you can manage it against other income and deductions, and you avoid the deemed-sale calculation for those assets. The disadvantage is you pay tax now rather than later. This strategy makes most sense for assets with very large unrealised gains where the exit tax and the actual sale tax would be similar anyway, and where managing the taxable year improves your overall position.

Strategy 5: Ensure 5-year compliance and file Form 8854 correctly

This is the baseline and the one that most NRIs fail through ignorance rather than intent. Before expatriating, engage a US CPA to review the prior 5 years of returns. The review should specifically check:

• Form 3520 and Form 3520-A for foreign trusts and large gifts from foreign persons
• Form 8621 for each PFIC position (Indian mutual funds, Indian ETFs, offshore investment structures)
• FBAR (FinCEN 114) for all foreign financial accounts exceeding USD 10,000 in aggregate at any point in the year
• Form 8938 (FATCA) for specified foreign financial assets above the applicable threshold
• Correct reporting of foreign rental income, business income, and investment income

If the review identifies gaps, the IRS Streamlined Filing Compliance Procedures may allow you to catch up without criminal prosecution, though penalties may still apply. Get compliant before you expatriate, not after.

Post-expatriation rules: how covered expatriate status follows you

Covered expatriate status does not end on the expatriation date. Two rules apply for the rest of your life.

IRC Section 2801, effective from June 16, 2008, imposes a tax on US persons who receive gifts or inheritances from covered expatriates. The tax is levied on the US recipient, not the expatriate. It is calculated at the highest estate or gift tax rate in effect at the time of the gift or bequest, currently 40%, on the value received. So if a covered expatriate parent gifts USD 500,000 to their US-citizen child, the child owes approximately USD 200,000 in Section 2801 tax. Small annual gifts below the annual exclusion amount under Section 2503(b) escape the tax, but large bequests at death do not.

This matters for NRIs who have US-citizen children. A covered expatriate cannot freely transfer wealth to US-resident children and grandchildren without the recipient incurring a significant US tax cost.

Section 877(b) alternative tax: US-source income earned by covered expatriates is taxed at the higher of the applicable NRA rate or the rate that would have applied if the person were still a US citizen. For most investment income this does not change the outcome, but it prevents covered expatriates from exploiting lower NRA rates on certain categories of US-source income that would otherwise be available.

Edge cases worth knowing

The Green Card that expired but was never formally abandoned. If you moved to India, let your card expire, and have been living in India for years without filing Form I-407, you may still be a legal permanent resident for US tax purposes. Consult a US immigration and tax attorney before taking any step. The clock on 8 years of LPR status may still be running.

The 8-year count when residency was interrupted. The count of 8 years is based on tax years as a lawful permanent resident. If you were outside the US for extended periods and your Green Card was technically in jeopardy, or if you had periods where you were not treated as a resident for tax purposes, the count may be fewer than the raw number of years since the card was issued. This is highly fact-specific and requires professional advice.

Dual nationality. Renouncing US citizenship does not automatically affect your Indian citizenship or your OCI status. India does not permit dual citizenship, so if you hold Indian citizenship you could not hold US citizenship simultaneously. OCI cardholders who renounce US citizenship retain their OCI status. The exit tax consequences are the same regardless of your other citizenships.

The Green Card holder married to a US citizen. If you are a Green Card holder and your spouse is a US citizen, the marital transfer planning described in Strategy 3 above is more available to you than to an expatriate with a non-US-citizen spouse. Plan both the immigration and the tax steps together.

Insolvent expatriates. If your liabilities exceed your assets, you may not be able to pay the exit tax in cash even though you are technically liable on the deemed sale gains. The IRS has instalment provisions for certain eligible deferred tax on specific assets, but these require security and are narrow in scope. Insolvency does not eliminate the obligation; it creates a collections problem.

Non-US real estate with no cost basis documentation. Indian real estate inherited years ago, or purchased when records were not kept carefully, presents a cost basis problem for the deemed sale. No documentation of cost basis means the IRS could argue the basis is zero, maximising the taxable gain. Document your basis in all foreign real estate before you expatriate.

The closing read

Exit tax is one of the few places in the US tax code where getting it wrong has permanent, uncorrectable consequences. The 30% withholding on IRA distributions is not a one-time penalty. It is a lifetime condition that follows every covered expatriate until the accounts are depleted. Section 2801 follows your estate and limits what you can transfer to US-person heirs. There is no filing to undo covered expatriate status once you have acquired it.

The structural asymmetry of this regime is worth naming clearly. A Green Card holder who leaves after 6 years faces none of this. A Green Card holder who waits one year too long, crosses the 8-year mark, and then leaves with a net worth of USD 2.1 million faces a significant exit tax and lifetime retirement account consequences. One year, a few hundred thousand dollars in appreciation, and the gap is enormous. The planning window is the 7th year.

For US citizens, the calculus is different because citizenship is not lost by the passage of time; you have to actively renounce. But for NRIs who naturalised and now want to return permanently, the timing of renunciation relative to asset appreciation is exactly the kind of multi-year modelling that a competent US CPA and an immigration attorney working together should be doing with you, starting several years before the intended departure.

File Form 8854. Get compliant for the prior 5 years. Know your Green Card year count. If you are approaching the 8-year mark and are not certain you want to stay permanently, take advice now, not after the calendar year rolls over.

Cross-references

• US 401(k) Pre-Departure Planning for NRIs -- how to handle a 401(k) when leaving the US, including rollover and Roth conversion planning before expatriation
• Roth IRA for US NRIs -- Roth mechanics, conversion strategy, and treatment under the India-US DTAA
• US Social Security and the India-US DTAA -- how Social Security benefits are taxed after you leave the US and return to India
• US NRI Annual Filing Calendar -- deadlines including the Form 8854 filing deadline and the dual-status return
• FBAR, FATCA and NRI Reporting Obligations -- the compliance checklist that determines whether you can certify on Form 8854
• Indian Mutual Funds and the PFIC Trap for US NRIs -- why every Indian mutual fund is a PFIC and how failure to file Form 8621 breaks your 5-year compliance record
• US Situs Assets and Estate Tax Planning for NRIs -- estate tax on US-situs assets, relevant to covered expatriates planning wealth transfers to US-person heirs
• India-US DTAA Deep Dive -- article-by-article analysis including Article 20 (pensions), the saving clause, and why treaty benefits are eliminated for covered expatriates on deferred compensation
• NRE Account Interest Taxation After Returning to India -- treatment of NRE balances and interest once you are resident in India again
• RNOR Tax Planning for Returning NRIs -- the RNOR window and how it interacts with US-source income in the years after you return

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Disclaimers

This article is general information and is not legal or tax advice. Exit tax under IRC Section 877A is highly fact-specific. The consequences of incorrect planning are severe and in most cases irreversible. The exclusion amount (USD 866,000), the net worth threshold (USD 2,000,000), and the average annual tax liability threshold (USD 201,000) are 2024 figures; the liability threshold and the exclusion are indexed annually and change each year. The net worth threshold has not been indexed since 2004. Verify all current figures before acting.

Before abandoning a Green Card or renouncing US citizenship, consult a US-qualified CPA with specific experience in expatriation under IRC Section 877A, and a US immigration attorney. These are two separate engagements; a CPA cannot advise on immigration law and an immigration attorney cannot advise on the tax consequences of the exit. Both are required.

Nothing in this article should be read as advice to renounce US citizenship or abandon a Green Card. Those are irreversible life decisions with consequences beyond tax.