Filing US expatriate tax returns for American expats Ireland

By Expat News

Ireland has always been one of the favorite destinations among American expats for its beauty, friendliness and culture. Moreover, many American expats in Ireland have Irish family ties that go back several generations. Proper expatriate tax preparation and planning is required to file US expatriate tax returns on overseas taxes due to complex residency, ordinary residency and domicile rules as well as Special Assignee Relief Program that was introduced in 2012. Quite often we get questions about expat tax rules and foreign income tax rates for expats Ireland as well as US expatriate tax services for Americans living in Ireland.

Expatriate tax rules and returns for expats Ireland

The first thing to remember is worldwide taxation of US citizens and green card holders. American expats Ireland are required to file US expatriate tax returns whether they live in Dublin or San Francisco. However, the IRS introduced several provisions to minimize the US tax liability and to avoid double taxation of US persons.

  • Foreign income exclusion. American expats Ireland can exclude up to $101,300 for 2016 on US expatriate tax returns if they lodge a US tax return and meet other expat tax requirements.
  • Foreign housing exclusion. Additionally, American expats Ireland may be able to reduce foreign earned income by deducting foreign housing expenses.
  • Foreign tax credit. American expats Ireland can take foreign tax credit for foreign income taxes paid in Ireland.

Additionally, American expats Ireland may be required to report foreign financial accounts and to file the FBARs as a part of expatriate tax preparation.

Tax system in Ireland – FAQ

I am an American expat residing in Ireland. Is my worldwide income taxed in Ireland?

– American expats Ireland who are considered residents and domiciled in Ireland are subject to Irish income tax on worldwide income and capital gains.

– American expats who are considered residents but not domiciled in Ireland are subject to a tax on any income and capital gains arising from the Irish sources and foreign income remitted to Ireland.

– Expats in Ireland who are not residents or ordinary residents in Ireland are subject to a tax to income from Irish sources and capital gains from the sale of Irish assets.

Who is considered a tax resident in Ireland?

American expat in Ireland is considered a resident in one of the following cases:

– s/he is present in Ireland for 183 days or more in the tax year.

– s/he is present in Ireland for the total 280 days in a current and prior tax year combined. This test doesn’t apply if an expat is not present for 30 days or more during a tax year.

What is the tax year for expats Ireland?

Ireland has a calendar tax year.

What are foreign income tax rates in Ireland?

The income tax rates in 2012 are 20% and 41%. Also, expats in Ireland may be liable for PRSI (Pay Related Social Insurance) at a rate of 4%. American expats may be subject to a Universal Social Charge that is calculated on a progressive basis of 2%-10% of total income.

Which income is taxable in Ireland?

Generally, all types of employment compensation and benefits are subject to income tax: salary, bonuses, cost of living allowances, use of a company car, on, foreign service allowance, housing and moving allowances, medical insurance provided by employer etc. However, some income is not taxable, for example, contributions by an employer to an Irish approved pension or profit sharing scheme, travel passes and bicycles provided by an employer, some non-contractual payments and foreign pension contributions.

Can expats Ireland file a tax return on overseas taxes with a spouse?

Spouses can file a joint or separate tax returns. However, the residence, ordinary residence and domicile of each spouse are determined independently.

Is it a requirement to file an Irish tax return every year?

Most tax returns in Ireland have to be filed by October 31 after the taxable year. The person who is subject only to PAYE is not required to submit a tax return.

Does Ireland have a tax treaty or social security agreement with the USA?

A new double tax treaty was signed on July 28, 1997 between the USA and Ireland. Also, a social security agreement between the USA and Ireland was signed on September 1, 1993 to improve social security protection of expats working in both countries. American expats Ireland should contact an expatriate tax professional to review personal circumstances and issues related to overseas taxes and filing requirements in Ireland.


These questions cover some of the general expat tax issues that expats Ireland should review before moving to Ireland and filing US expatriate tax returns.

American expatriates with additional questions about US expatriate tax preparation, FATCA, FBARs, PFIC or any other overseas tax issues should seek assistance of an expatriate tax CPA. Tax experts at Artio Partners provide international tax services and will be pleased to assist you.