Summary: The United States has entered into income tax treaties with more than 60 countries. However, there's very little U.S. tax relief available to a U.S. citizen who's living abroad under the terms of an income tax treaty.

The United States has entered into income tax treaties with more than 60 countries. If you're an expat who's working in one of those countries for a short time, you might be exempt from taxes in that foreign country.

However, there's very little U.S. tax relief available to a U.S. citizen who's living abroad under the terms of an income tax treaty. Income tax treaties usually contain a provision that allows the United States to tax its citizens and residents as if the treaty didn't exist.

U.S. income tax treaties might still provide tax benefits to citizens and residents by granting:

Exemption from U.S. tax on Social Security benefits
A special credit available for foreign tax paid on certain U.S. source income

Also, under the terms of certain treaties, U.S. taxpayers with foreign retirement accounts can:

Deduct contributions to the accounts
Defer tax on earnings in the accounts until distribution

These kinds of foreign retirement accounts don't usually qualify for such treatment.

As an expat, U.S. income tax treaties may provide you with an exemption from foreign country taxation. If you think you might qualify for treaty benefits available to U.S. expats in your foreign country of residence, ask the IRS for a residency certification. This certification is granted through Form 6166. Certification allows you to support your claim for treaty benefits in a foreign country. An H&R Block expat tax advisor can help you compile your information and request this documentation from the IRS.

For more information, contact an H&R Block Expat Tax Advisor at www.hrblock.com/expats.

U.S. Income Tax Treaties