Liable for American tax: two reporting duties, and the child born there

Almost every country taxes you because you live there. America also taxes you because you are one — and those two words differ more than you think. For whoever goes to the United States for a few years and comes back afterwards, this is the chapter with the longest aftermath.

Worldwide income, from your first year

As soon as you have a green card, or have been in the US enough days for the substantial presence test, you're a "resident alien" for tax purposes. Then America taxes your worldwide income: your American salary, but also your Dutch savings interest, your rented-out home in the Netherlands and the profit of your BV.

Paying twice usually isn't necessary — the tax treaty and the foreign tax credit prevent that — but filing is required, and that's a different obligation from paying. That distinction is where most people get stuck: "but I already pay tax there" says nothing about your filing obligation in the US.

Two reporting duties, and one doesn't replace the other

This is the pitfall even careful people fall into, because it seems logical that one report is enough. It isn't.

The FBAR. If all your foreign accounts together exceed 10,000 dollars at any moment in the year, you report them. Note the word together: three accounts of four thousand euros add up to above the limit. The FBAR doesn't go to the IRS but to FinCEN, and it isn't part of your return — it's a separate electronic report. The penalties for forgetting are hefty, and for wilful violation extreme.

Form 8938. This form does go with your return, to the IRS, and has higher thresholds. If you live outside the US, the duty starts at 200,000 dollars in foreign financial assets on 31 December (single) or 400,000 dollars (married, filing jointly). If you live in the US, those limits are much lower.

They overlap, but they don't replace each other: whoever is above both thresholds does both. And whoever is only above the ten thousand does only the FBAR. The IRS puts them side by side itself — that's the table you want to print.

A child born there is American

If your child is born in the United States, it's an American citizen — regardless of your nationality and regardless of which visa you hold. That follows from the Fourteenth Amendment and from 8 U.S. Code §1401.

And that citizenship doesn't end on departure. America taxes its citizens on nationality, not on residence: that child has to file American returns on its worldwide income for life, even if it returns to the Netherlands at two and never comes back. In practice it only runs into that when opening an investment account or taking out a mortgage, because Dutch banks have to report American customers separately under FATCA and some prefer to refuse them.

This point is politically in motion, and you should hear that from us. In January 2025 President Trump signed an order that sought to restrict birthright citizenship for children of parents without residence rights or on a temporary visa. The Supreme Court declared that order unconstitutional on 30 June 2026, by six votes to three, and thereby confirmed the rule as described above. On 6 August 2026 a new, much narrower order followed that targets children of foreign government officials and a handful of other categories; that too is before the courts. For a Dutch family on a work visa, then, the rule at this moment is simply: born in America is American.

Renouncing is possible — and became much cheaper this year

Whoever doesn't want to keep the citizenship can renounce it at an American consulate. The administrative fee for that stood at 2,350 dollars for years and has been reduced to 450 dollars since 13 April 2026 — the level from before 2015.

So the amount is no longer the threshold; the tax side is. Whoever exceeds certain asset or tax limits counts as a covered expatriate and faces the exit tax: a settlement as if you sold all your assets on the day before your renunciation. For a child that has never worked in America that rarely plays a role, but it's a conversation with a tax adviser and not a little form.

What you do with this

Three things, and none of them cost money:

1. Know before departure whether you're below the thresholds. Add up your Dutch accounts — savings accounts, investment accounts, an annuity. Above ten thousand dollars the FBAR is yearly work.
2. Factor in family planning. If there's a wish for children and you expect to come back after a few years, the place of birth is a choice with consequences that last decades. No reason to forgo it — but something to do consciously.
3. Find a tax adviser who knows both countries, before you go. Not after. The most expensive mistakes in this chapter are the ones you make unknowingly in your first year.

Vertrekklaar gives no tax advice and doesn't assess your return. What we do: tell you in time when this conversation is due — and that's before your plane leaves.