For U.S. tax purposes, green card holders are normally treated as U.S. residents and must report their worldwide income. This may include Dutch salary, self-employment income, investments, pensions and other income. Depending on the circumstances, additional reporting may also be required for Dutch bank accounts and other foreign financial assets.
When Does U.S. Tax Residency End?
U.S. tax residency under the green card test generally continues until your permanent resident status is formally abandoned, administratively terminated or judicially terminated. Simply moving to the Netherlands, allowing the card to expire or stopping the filing of U.S. tax returns is usually insufficient.
In some cases, an individual may claim residence in the Netherlands under the U.S.–Netherlands tax treaty. However, taking a treaty position can trigger additional reporting and may have expatriation-tax consequences.
Special Rules for Long-Term Green Card Holders
If you held a green card in at least eight of the previous fifteen tax years, ending your status may make you a “long-term resident” under U.S. expatriation rules. Form 8854 and the covered-expatriate rules may then require careful review.
Sanders US Tax Services specializes in the preparation of U.S. tax returns for taxpayers with an international tax situation. We speak Dutch. We can help you understand your U.S. tax filing obligations and the U.S. tax consequences of ending your green card status.
Kristina Thomas
Originally from Indiana, Kristina has lived in the Netherlands for 10 years. She's a tax senior at our Rotterdam office. Kristina knows everything there is to know about moving to the Netherlands under the DAFT agreement.
Sunitha Uthappa
Sunitha lives in The Hague and is a tax manager at our Rotterdam office. She specializes in the preparation of U.S. individual income tax returns.
Revathi
Expired Green Card FAQ's
Generally, yes, if you meet the applicable filing requirements. An expired physical green card does not automatically end your U.S. tax residency. Unless your status has ended under the relevant rules or an eligible treaty position applies, you generally remain subject to U.S. tax on worldwide income, including income earned in the Netherlands.
No. Filing a Dutch tax return and paying Dutch income tax do not automatically replace your U.S. filing obligations. If you remain a U.S. tax resident, you generally must report your worldwide income to the IRS. Foreign tax credits and other relief may reduce or eliminate additional U.S. income tax, but a return may still be required.
A common route is to formally abandon lawful permanent resident status by filing Form I-407. Status can also end through certain administrative or judicial decisions. Simply leaving the United States or allowing your card to expire is generally insufficient. The effective tax residency termination date and any final-year filing requirements need separate assessment.
Potentially. If you qualify as a resident of both countries under their domestic laws, the treaty’s residency tie-breaker rules may establish that you are a resident of the Netherlands for treaty purposes. Claiming this treatment generally requires Form 1040-NR with Form 8833. For long-term green card holders, it can also trigger expatriation rules, so the consequences should be assessed before claiming it.
Yes. You generally qualify as a long-term resident if you held lawful permanent resident status in at least eight of the fifteen tax years ending with the year your status ends, subject to certain treaty exceptions. Ending that status generally requires Form 8854. Exit tax consequences depend on whether you are a covered expatriate, including your net worth, prior income tax liabilities, and certification of five years of U.S. tax compliance. Exit tax is not automatic.
We regularly assist clients in this situation and can usually address your questions during a 30-minute video call. We can also prepare your final U.S. tax return, including Form 8854 if required, and thoroughly review your filing history for the five tax years preceding the year in which you end your green card status.