Dual Nationality: U.S. Taxes, Passports, and Renunciation

Dual nationality means holding citizenship in the United States and another country at the same time, and U.S. law permits it without asking you to choose. What that status actually requires of you is a different question: you owe allegiance and obedience to both countries’ laws, you file U.S. taxes on worldwide income no matter where you live, you use a U.S. passport to enter and leave the United States, and you may run into military service, consular, or benefits questions that a single-citizenship American never encounters.

How People End Up With Two Citizenships

Most dual citizens didn’t apply for the second passport. Two principles working at birth produce the result automatically. Jus soli grants citizenship based on place of birth, and jus sanguinis grants it based on a parent’s nationality. A child born in the United States to parents who are citizens of a country that transmits citizenship by descent holds both from day one, with no paperwork filed by anyone.¹

The second path opens later. A permanent resident who naturalizes in the United States takes an oath that includes language about renouncing foreign allegiance, but in practice this does not strip the person of their original citizenship unless that other country independently revokes it.² Marriage, descent claims filed as an adult, and naturalization abroad by a U.S. citizen all produce dual status as well.

Where U.S. Law Stands

Federal law neither encourages nor prohibits the arrangement. The State Department’s position is that “U.S. law does not require a U.S. citizen to choose between U.S. citizenship and another nationality,” and a citizen “may naturalize in a foreign state without any risk to their U.S. citizenship.”³

The permission comes with a caveat the same guidance spells out: dual nationals “owe allegiance to both the United States and the foreign country” and “are required to obey the laws of both countries.” Either government can enforce its own laws against you, and conflicting obligations sometimes arise.³ The rest of what follows is the practical shape of that double allegiance.

U.S. Taxes on Worldwide Income

The United States is one of very few countries that taxes based on citizenship rather than residency. If you’re a U.S. citizen, your worldwide income is subject to U.S. income tax regardless of where you live or where you earned it.⁴ That obligation runs every year you hold the citizenship, even if you haven’t set foot in the country for decades.

Foreign Account Reporting

Dual citizens living abroad typically hold bank accounts in their country of residence, which triggers two separate reports. If the combined value of your foreign financial accounts exceeds $10,000 at any point during the year, you file FinCEN Form 114, known as the FBAR. It goes to the Financial Crimes Enforcement Network electronically, not to the IRS with your return.⁵

If your foreign financial assets exceed higher thresholds, Form 8938 under FATCA is also required. Taxpayers in the United States file at $50,000 on the last day of the year or $75,000 at any point during it. Dual citizens living abroad have higher thresholds: $200,000 on the last day or $300,000 at any point filing individually, and $400,000 or $600,000 respectively filing jointly.⁶ FBAR and Form 8938 are separate filings with different thresholds, and you may owe both.

Avoiding Double Taxation

Filing does not always mean paying twice. The foreign tax credit, claimed on Form 1116, generally reduces your U.S. tax bill dollar for dollar by the income tax you already paid to another country. If your foreign tax is relatively small and relates entirely to passive income like interest or dividends, you can claim up to $300 in credits ($600 if married filing jointly) without filing Form 1116 at all.⁷

Dual citizens who live and work abroad also have the Foreign Earned Income Exclusion, which lets you exclude up to $132,900 in foreign-earned wages for tax year 2026.⁸ Between the exclusion and the credit, many dual citizens in countries with comparable or higher tax rates owe nothing extra to the IRS. The paperwork still has to be filed. Skipping the return because you expect to owe zero is a mistake that can trigger penalties and complicate your status.

Traveling on Two Passports

Federal law requires U.S. citizens to use a valid U.S. passport when entering or leaving the country.⁹ The State Department states the same rule specifically for dual nationals: they “must use a U.S. passport to enter and leave the United States.”³

On a trip abroad, the practical routine is straightforward. You book the ticket and board using the passport that grants entry at your destination. Leaving the United States, you present the U.S. passport. On arrival abroad, you switch to the foreign one. The reverse applies on the return. Most countries expect their own citizens to enter on their national document, so traveling on the wrong passport can mean being treated as a visitor subject to immigration limits rather than as a citizen with full rights.

ETIAS for Europe Starting in Late 2026

Starting in the last quarter of 2026, U.S. citizens traveling to the Schengen area will need an ETIAS (European Travel Information and Authorization System) authorization before departure. It is electronically linked to your passport, valid for three years or until the passport expires, and covers short stays of up to 90 days.¹⁰ Dual citizens who also hold an EU passport can ignore ETIAS when traveling on that document. If you enter Europe on your U.S. passport for any reason, you need the authorization first.

Consular Help in Your Other Country

One quieter consequence of dual nationality is that your other country can largely shut out U.S. consular assistance while you’re on its soil. Under the master nationality rule in international law, a country you’re a citizen of has the right to treat you as solely its own. The State Department warns that dual nationals “may face restrictions in the U.S. consular protections available to U.S. nationals abroad, particularly in the country of their other nationality.”³

This matters most in countries with mandatory military service, exit restrictions, or legal systems that differ significantly from what Americans expect. If your other country enforces a conscription obligation or prevents you from leaving until you fulfill it, the U.S. Embassy may be limited to informal representations rather than formal diplomatic protection.

Military Service on Both Sides

The State Department notes that dual nationals may face mandatory military service in their other country, and those obligations can be “imposed immediately upon arrival or when attempting to leave the country.”¹¹ Countries including Israel, South Korea, and Turkey enforce conscription on their citizens regardless of where those citizens grew up.

On the American side, dual national men must register with Selective Service within 30 days of turning 18, whether they live in the United States or abroad.¹² Failure to register can affect federal student aid, government employment, and, for those who are also permanent residents, naturalization.

Social Security and Medicare From Abroad

U.S. citizens who qualify for Social Security retirement, survivor, or disability benefits can generally keep receiving payments while living abroad in most countries.¹³ A handful of countries are excluded, and SSA offers a screening tool for specific destinations. Non-citizen beneficiaries face stricter rules, including suspension after six consecutive calendar months outside the United States unless an exception applies.¹⁴ Your U.S. citizenship generally protects your benefit payments in ways a green card alone would not.

Workers who split their careers between two countries risk paying into both Social Security systems or falling short of the minimum work credits in either. Totalization agreements handle both problems. The United States has agreements with 30 countries, including Canada, the United Kingdom, Germany, Japan, Australia, and South Korea. They assign coverage to one country based on where you work and let workers combine credits from both systems to qualify for benefits.¹⁵

Medicare is less forgiving. Coverage generally does not extend outside the 50 states and U.S. territories, so dual citizens abroad get limited value from enrollment. The timing catch is real, though: if you don’t enroll in Part B when you first become eligible at 65, you face a permanent late-enrollment penalty of 10 percent of the standard premium for every 12 months you delayed. Citizens who were living abroad at 65 get a special seven-month enrollment window when they move back, which avoids the penalty. Anyone who may return should weigh whether paying Part B premiums from overseas beats the surcharge later.

Federal Jobs and Security Clearances

Dual nationality does not automatically disqualify someone from federal employment or a security clearance, but it invites closer scrutiny. The Department of Justice’s Office of Legal Counsel has concluded that statutes requiring employees to be “citizens of the United States” do not bar people who also hold a second citizenship.

Clearance adjudicators evaluate dual citizens under the National Security Adjudicative Guidelines, looking at whether conduct suggests a foreign preference or unresolved foreign influence. Voting in foreign elections, accepting foreign government benefits, using a foreign passport for travel, and inconsistent explanations about foreign ties all raise concerns. Holding a foreign passport is no longer an automatic disqualifier, but its use must be disclosed and justified. The process uses a whole-person analysis, so the context and totality of your foreign ties matter more than any single factor.

Giving Up U.S. Citizenship

U.S. citizenship ends only when a person voluntarily performs a specific act listed in federal law and does so with the intention of giving up American nationality. The statute lists several triggering acts:¹⁶

Formal renunciation abroad before a U.S. diplomatic or consular officer under an oath of renunciation.
Naturalizing in a foreign state with the specific intent to relinquish U.S. nationality.
Serving in the armed forces of a country engaged in hostilities against the United States, or serving as a commissioned or non-commissioned officer in any foreign military.
Accepting a policy-level position in a foreign government while holding or acquiring that country’s nationality.
Being convicted of treason, seditious conspiracy, or attempting to overthrow the U.S. government by force.

The intent requirement is the critical protection. The government must prove the person not only performed the act voluntarily but also intended to give up citizenship. Without that proof, the act alone does not terminate your status, which is why routine interactions with a second country of citizenship do not cost anyone their American nationality.¹⁶

Renunciation Fee

For those who affirmatively renounce, the administrative fee dropped in 2026. Effective April 13, 2026, the State Department reduced the fee for processing a Certificate of Loss of Nationality from $2,350 to $450.¹⁷

The Exit Tax

The administrative fee is only part of the cost. Renouncing citizenship (or giving up long-term permanent residency) can trigger the expatriation tax. The IRS treats a “covered expatriate” as having sold all worldwide assets at fair market value on the day before the expatriation date, taxing any unrealized appreciation.¹⁸

You qualify as a covered expatriate if you meet any one of three tests: your average annual net income tax liability over the five prior years exceeds an inflation-adjusted threshold (roughly $211,000 for 2026), your net worth is $2 million or more on the date of expatriation, or you cannot certify five years of federal tax compliance. A portion of the deemed-sale gain is excluded; the exclusion was $890,000 for 2025 and adjusts annually.¹⁹ Everything above the exclusion is taxed as capital gains. For anyone with significant assets, the exit tax can dwarf the administrative fee many times over, and professional tax advice before renouncing is essential.

1
U.S. Embassy And Consulate General In The Netherlands. Child Citizenship Act
2
Office of the Law Revision Counsel. 8 USC 1448 – Oath of Renunciation and Allegiance
3
U.S. Department of State. Dual Nationality
4
Internal Revenue Service. Frequently Asked Questions About International Individual Tax Matters
5
Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
6
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
7
Internal Revenue Service. Instructions for Form 1116
8
Internal Revenue Service. Figuring the Foreign Earned Income Exclusion
9
Office of the Law Revision Counsel. 8 USC 1185 – Travel Control of Citizens and Aliens
10
European Union. What is ETIAS
11
Travel.State.gov. Dual Nationality
12
Selective Service System. Who Needs to Register
13
USA.gov. Getting Social Security Benefits if You Are Living Outside the U.S.
14
Social Security Administration. Social Security Payments Outside the United States
15
Social Security Administration. U.S. International Social Security Agreements
16
Office of the Law Revision Counsel. 8 USC 1481 – Loss of Nationality by Native-Born or Naturalized Citizen
17
Federal Register. Schedule of Fees for Consular Services – Fee for Administrative Processing of Request for Certificate of Loss of Nationality
18
Office of the Law Revision Counsel. 26 U.S. Code 877A – Tax Responsibilities of Expatriation
19
Internal Revenue Service. Expatriation Tax