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U.S. Expatriation Tax · IRC §877A · Last verified JUN 2026 · Informational, not tax advice

The Dual-Citizen Exception to the Exit Tax

Last verified JUN 2026 IRC §877A Informational, not tax advice
Two passports from different countries on a desk

The dual-citizen exception lets some people avoid covered-expatriate status even if they exceed the net-worth or income test. You must have been a citizen of the US and another country at birth, still hold and be taxed by that other country, and have been a US resident for no more than 10 of the last 15 years. You must still certify tax compliance on Form 8854.

This is one of only two ways to clear a wealth test and still avoid the exit tax. It exists because Congress did not want to penalize people who were American by accident of birth but built their lives elsewhere.

The three conditions, all required

  1. Dual citizen at birth. You became a citizen of the US and another country at the time of your birth. Later naturalization elsewhere does not count.
  2. Still a citizen and taxpayer there. As of your expatriation date you remain a citizen of, and are taxed as a resident by, that other country.
  3. Limited US residency. You were a US resident in no more than 10 of the 15 tax years ending with the year you expatriate.

All three met = not covered on wealth tests

The Form 8854 catch

The exception only switches off the net-worth and income tests. The certification test still applies in full. If you cannot certify five years of US tax compliance, you are a covered expatriate regardless of the exception. For many people this means getting compliant first, which is exactly the issue facing accidental Americans.

No certification = covered anyway

The minor exception, briefly

A parallel exception covers people who expatriate before age 18½ and were US residents for no more than 10 years before that. The same Form 8854 certification requirement applies.

How to use it

If you think you qualify, confirm the residency count carefully, because any part of a year as a US resident can count, and gather proof of your other citizenship and tax residency. Then estimate your overall position in the calculator and read how to reduce the exit tax for the steps that go around it.

Sources: IRC §877A(g)(1)(B); IRS expatriation guidance. See sources.

Frequently asked questions

What is the dual-citizen exception to the exit tax?
It lets certain people who were dual citizens at birth avoid covered-expatriate status even if they exceed the net-worth or income test. You must have been a US and other-country citizen at birth, still hold and be taxed by that other country, and have been a US resident for no more than 10 of the last 15 tax years.
Do I still file Form 8854 if I qualify?
Yes. The exception removes the net-worth and income tests, but you must still file Form 8854 and certify five years of US tax compliance. Without that certification you become a covered expatriate anyway.
Does the exception apply if I became a dual citizen later?
No. The exception requires that you were a citizen of both countries at birth. Acquiring a second citizenship later in life does not qualify you for it.
What counts as the 10-of-15-years residency limit?
You must have been a US resident, under the substantial-presence or green-card rules, in no more than 10 of the 15 tax years ending with your expatriation year. Spending most of your life in your other home country is what makes the exception fit.
Is there a similar exception for minors?
Yes. Someone who expatriates before age 18½ and was a US resident for no more than 10 years before that can also avoid covered status, again provided they certify tax compliance on Form 8854.
This article is general information about US tax law, not tax or legal advice. Figures are for the years stated and may change. Confirm your situation with a qualified CPA or tax attorney before acting.