The USA decides your tax residence by counting days, not by asking where your home is. Spend enough time there over three years and you're taxed on your worldwide income, even if you never meant to move. Hold a green card and you're resident whatever your days.
This guide covers US personal tax for people moving to the USA in the 2026 tax year: the day-count test, green cards and the exit tax, federal and state rates (Florida and California compared), self-employment, investments, crypto and filing.
The key question is simple. Which state will you live in? Federal tax is the same everywhere, but state income tax runs from nothing in Florida to 12.3% in California.
What's changed: the One, Big, Beautiful Bill Act, signed in July 2025, set the rules for 2026. The 10% to 37% rates stay, the standard deduction is US$16,100 for a single person, and the estate tax exemption is US$15 million. For 2025 to 2028, new deductions cover up to US$6,000 for people aged 65 or over, US$25,000 of tips and US$12,500 of overtime pay, with income limits. From 2026, crypto brokers also report cost basis to the IRS on certain sales, not just sale proceeds.
📋 USA tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Worldwide income for residents. Federal tax plus state tax in most states |
Top income tax rate | 37% federal above US$640,600 (single). State tax on top: none in Florida, up to 12.3% in California, plus 1% above US$1 million |
All-in on a US$100k salary | About 21% in Florida, or about 27% in California (single, including Social Security and Medicare) |
Foreign income | Taxed in full once you're resident, with credit for foreign tax paid |
Dividends, interest, capital gains | Long-term gains and qualified dividends 0%, 15% or 20%. Interest at income tax rates. 3.8% extra above US$200,000 |
Crypto gains | Taxed as property: 0% to 20% if held over a year, income tax rates if not |
Residence at a glance | Getting in: easy, by day count or green card. Leaving: hard for green card holders, with an exit tax after 8 of 15 years |
Double tax treaties | Income tax treaties with more than 60 countries |
The substantial presence test: how the US counts your days
Why do people become US tax resident by accident? Because the test adds up three years of visits, whether or not you have a home in the US.
Image 1 — count your days, or hold a green card
You're resident for a calendar year if you're in the US for at least 31 days in that year and for 183 days over three years, counted like this:
every day in the current year
one third of the days in the year before
one sixth of the days in the year before that
So 120 days a year, every year, gives you 180 weighted days and keeps you under. 122 days a year tips you over in the third year. A few days don't count, such as transit stops of under 24 hours, days you can't leave because of a medical condition, and days as an "exempt individual", for example a student or teacher on certain visas (Form 8843).
If you meet the test but were in the US for fewer than 183 days in the current year, you can still be treated as nonresident under the closer connection exception. You need a tax home in one foreign country for the whole year and a closer connection to it than to the US, and you must file Form 8840 by the due date of your return. You can't use it if you applied for a green card during the year or took other steps to become a permanent resident.
👉 IRS: the substantial presence test
👉 IRS: the closer connection exception and Form 8840
When you become tax resident in the USA, and how you stop
Under the day count, your residence usually starts on the first day you're in the US in the year you meet the test. Under the green card test, it starts on the first day you're in the US as a lawful permanent resident.
In your first and last years you're often "dual-status": nonresident for part of the year and resident for the rest.
Leaving depends on how you became resident:
Day count: you stop meeting the test once your weighted days fall below 183. In the year you leave, your residence can end on your last day in the US if your tax home is abroad and you have a closer connection to that country for the rest of the year.
Green card: you stay resident until you give up the status in writing to US Citizenship and Immigration Services, or it's ended by the authorities or a court. Moving abroad doesn't end it by itself.
Held a green card in at least 8 of the last 15 tax years? Then you're a long-term resident, and giving it up brings the expatriation tax rules. You're a "covered expatriate" if your average annual net income tax over five years is above US$211,000 (2026), your net worth is US$2 million or more, or you can't certify five years of compliance on Form 8854. You're then taxed as if you sold everything the day before leaving, with the first US$910,000 of gain excluded in 2026.
Most foreign nationals leaving the US also need an IRS "sailing permit" (Form 1040-C or 2063) showing their tax is settled. Apply two weeks to 30 days before you go.
👉 IRS Publication 519: residency start and end dates and dual-status years
👉 IRS: expatriation tax for long-term residents
👉 IRS: departing alien clearance (sailing permit)
Income tax rates for 2026
The US tax year is the calendar year. Federal income tax is charged on your taxable income after the standard deduction of US$16,100 for a single person (US$32,200 for a married couple filing jointly), or your itemised deductions if they're higher.
USA federal income tax rates for 2026 (single)
Taxable income | Rate |
|---|---|
Up to US$12,400 | 10% |
US$12,401 to US$50,400 | 12% |
US$50,401 to US$105,700 | 22% |
US$105,701 to US$201,775 | 24% |
US$201,776 to US$256,225 | 32% |
US$256,226 to US$640,600 | 35% |
Over US$640,600 | 37% |
Source: IRS Revenue Procedure 2025-32. Bands for a married couple filing jointly are roughly double, with 37% starting above US$768,700.
👉 IRS: tax inflation adjustments for tax year 2026
State income tax: Florida and California
Most states charge their own income tax on top. Our ratings use Florida, which doesn't impose a personal income tax at all. California is the other big destination and one of the most expensive.
Florida: no personal income tax and no state income tax return.
California: residents are taxed on all their income, wherever it comes from, at 1% to 12.3%, plus a 1% Behavioral Health Services Tax on taxable income above US$1 million. Employees also pay 1.3% State Disability Insurance on all wages in 2026. You're resident if you're there for other than a temporary or transitory purpose.
California hasn't yet published its 2026 rate schedule, so our California figures use the 2025 schedule and standard deduction (US$5,706).
👉 Florida Department of Revenue: no personal income tax
👉 California Franchise Tax Board: 2025 tax rate schedules
👉 California Franchise Tax Board: residency status
👉 California EDD: 2026 State Disability Insurance rate
Worked example
You're single, move to Florida and earn a salary of US$100,000 in 2026.
After the US$16,100 standard deduction, your taxable income is US$83,900 and your federal income tax is US$13,170.
You pay 6.2% Social Security and 1.45% Medicare on your full salary: US$7,650.
Your all-in bill is US$20,820, or about 20.8% of your salary. In California the same salary also pays about US$5,208 of state income tax and US$1,300 of disability insurance, taking it to about 27%.
Freelancing in the USA
Self-employed people pay self-employment tax instead of the employee share of Social Security and Medicare. It's 15.3% (12.4% Social Security and 2.9% Medicare) on 92.35% of your net profit, once your net earnings reach US$400. The 12.4% part stops at the 2026 wage base of US$184,500, and 0.9% Additional Medicare Tax applies above US$200,000 for a single person.
Two things soften it. Half of your self-employment tax is deductible from your income. And most sole traders can claim the qualified business income deduction of up to 20% of their business profit, limited to 20% of taxable income. Below the 2026 threshold of US$201,750 of taxable income for a single person, the extra limits for service businesses such as consulting, and for wages paid, don't apply.
On US$100,000 of profit in Florida, self-employment tax is about US$14,130 and federal income tax about US$8,235: about 22.4% all-in, or about 27% in California.
👉 IRS: the qualified business income deduction
Crypto, investments and pensions
How is crypto taxed in the USA? The IRS treats digital assets as property. Selling, swapping and spending crypto are disposals. Gains on assets held for more than a year get the long-term rates below; shorter holdings are taxed at income tax rates. Mining and staking rewards are ordinary income.
Long-term capital gains and qualified dividends are taxed at 0%, 15% or 20%. For a single person in 2026, the 0% rate applies to taxable income up to US$49,450 and the 15% rate up to US$545,500. Interest is taxed as ordinary income. On top, the 3.8% net investment income tax applies to investment income where your modified adjusted gross income is above US$200,000 (single) or US$250,000 (married filing jointly).
Watch out for funds based outside the US. A foreign fund or ETF is often a passive foreign investment company (PFIC), with harsh rules and an annual Form 8621.
Foreign pensions are generally taxable once you're resident, unless a treaty says otherwise, so check the treaty with the paying country. From 2025 to 2028, people aged 65 or over get an extra deduction of up to US$6,000, reduced above US$75,000 of income.
Federal estate tax applies to people domiciled in the US above an exemption of US$15 million in 2026. Gifts to a spouse who isn't a US citizen are tax free only up to US$194,000 a year.
👉 IRS: net investment income tax
👉 IRS: Form 8621 for passive foreign investment companies
👉 IRS: the new deductions for seniors, tips and overtime
👉 IRS Revenue Procedure 2025-32: 2026 capital gains bands, estate and gift figures
Social security
Employees pay 6.2% Social Security on wages up to US$184,500 in 2026, plus 1.45% Medicare on all wages. Employers pay the same again. Above US$200,000 of wages, a single person also pays 0.9% Additional Medicare Tax.
Health insurance usually comes through an employer or a private plan. It isn't in our all-in figures.
The US has social security (totalization) agreements with 31 countries, including the UK, Canada, Germany, France, Ireland, Japan and Australia. If your employer sends you to the US for five years or less, you can usually stay in your home country's scheme and skip US Social Security, with a certificate of coverage from home.
👉 Social Security Administration: 2026 wage base and tax rates
👉 IRS: Additional Medicare Tax
👉 Social Security Administration: international agreements
Double tax treaties
Does the USA have double tax treaties? Yes. The IRS lists income tax treaties with more than 60 countries, including the UK, Canada, Mexico, Germany, France, Ireland, Spain, Italy, India, Japan and Australia. There's none with the UAE, Singapore, Hong Kong or Brazil.
If you're resident in two countries, a treaty tie-breaker can decide which one wins. Careful: a long-term green card holder who claims treaty residence elsewhere (Forms 8833 and 8854) is treated as ending long-term residence, which can trigger the exit tax. With or without a treaty, you claim a foreign tax credit on Form 1116 for foreign income tax on income the US also taxes.
👉 IRS: the foreign tax credit (Form 1116)
👉 IRS: United States income tax treaties, A to Z
Staying long term: there's no digital nomad visa
The USA doesn't offer a digital nomad visa. Citizens of the 42 Visa Waiver Program countries, including the UK, can visit for up to 90 days with an approved ESTA, but employment isn't a permitted purpose of the trip.
To live and work in the US, you need a work visa, such as the petition-based H, L and O visas, an E treaty trader or investor visa or a USMCA (TN) visa, or a green card. Most need an employer or an investment behind them.
👉 US Department of State: the Visa Waiver Program
👉 US Department of State: employment visas
Who is the USA good for?
How does the USA compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including Social Security and Medicare. We rate the USA as a single person living in Florida, with no state income tax.
☑️ Who is the USA good for? Tax ratings for expats in 2026
Expat profile | USA rating | Why |
|---|---|---|
Employees | Moderate | About 20.8% all-in on a US$100k salary in Florida, including 7.65% Social Security and Medicare. About 27% in California. |
Freelancers (self-employed) | Moderate | About 22.4% all-in on US$100k of profit in Florida, including 15.3% self-employment tax. Half of it is deductible, and the 20% qualified business income deduction cuts your income tax. About 27% in California. |
Retirees | Good | About 2.8% on a US$40k foreign pension plus US$20k of qualified dividends at 65 or over (4.4% under 65), with no state tax in Florida. Good rather than Excellent because federal estate tax applies above US$15 million. |
Crypto gains | Good | About 5.2% on a US$100k long-term gain on its own, as the first slice is taxed at 0%. On top of other income it's 15% (20% at high incomes), plus 3.8% above US$200,000. |
Investment income | Good | About 2.7% on US$40k of qualified dividends and US$40k of long-term gains from a US$1m portfolio, single, in Florida. About 6% if the income is interest. Non-US funds can cost far more. |
Digital nomad visa | Poor | No digital nomad visa. Visa Waiver stays rule out work, so living and working in the US needs a work visa or a green card. |
Filing and deadlines
Residents file Form 1040 and nonresidents file Form 1040-NR. The return for 2026 is due on 15 April 2027. Form 4868 gives you an automatic six-month extension to file, but not to pay, so any tax due is still payable by 15 April.
If you expect to owe US$1,000 or more, you pay estimated tax in four instalments: 15 April, 15 June and 15 September 2026, and 15 January 2027.
Foreign accounts need reporting too. If your non-US accounts add up to more than US$10,000 at any time in the year, you file an FBAR (FinCEN Form 114) online by 15 April, extended automatically to 15 October. A single person living in the US also files Form 8938 with the return if foreign financial assets are worth more than US$50,000 at the end of the year or US$75,000 at any time.
👉 IRS: when to file and Form 4868
👉 IRS Form 1040-ES (2026): estimated tax due dates
👉 IRS: comparison of Form 8938 and FBAR requirements
Frequently asked questions
How many days can I spend in the USA without becoming tax resident?
Under the substantial presence test you're resident if you spend at least 31 days in the US this year and 183 days over three years, counting all of this year's days, a third of last year's and a sixth of the year before. 120 days every year keeps you under.
Does a green card make me US tax resident?
Yes. A lawful permanent resident is US tax resident wherever they live and however few days they spend in the US, until the status is formally given up or ended.
Is there an exit tax when I give up a green card?
Only if you held it in at least 8 of the last 15 tax years and are a covered expatriate, for example with net worth of US$2 million or more. Your assets are then treated as sold, with the first US$910,000 of gain excluded in 2026.
What are the US income tax rates in 2026?
Federal rates run from 10% to 37%, with 37% above US$640,600 for a single person, after a standard deduction of US$16,100. State tax comes on top: none in Florida, up to 12.3% in California.
How is crypto taxed in the USA?
Crypto is property. Gains on coins held for more than a year are taxed at 0%, 15% or 20%, and shorter-term gains at your income tax rates. Mining and staking rewards are ordinary income.
Where to go next
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
