If you’re a US citizen living abroad, you may still wonder: Do I qualify for a US tax refund? The answer is yes, US expats can qualify for a refund, depending on their individual situation. Even though you live outside the United States, you’re still required to file a US tax return each year, and in many cases, you may be entitled to a refund from the IRS.
Let’s break down the different scenarios where expats might qualify for a refund, the common reasons refunds are issued, and what you need to do to claim one, even while living overseas.
Do I have to file a US Tax Return while living abroad?
Yes. If you’re a US citizen or green card holder, you must file a US tax return each year, no matter where you live. The US is one of the only countries that taxes based on citizenship, not just residency.
Your worldwide income—whether earned in the US or abroad—must be reported to the IRS. That means if you earn income in France, Japan, Denmark, or anywhere else, you’re still subject to US tax reporting requirements.
How can an expat get a US Tax Refund?
Not every taxpayer gets a refund, but several circumstances can result in a refund for Americans living abroad. Some of the most common include:
Overpaid US Taxes
If you had US taxes withheld from income (such as from a US employer, pension, or investment), and your total tax liability ends up being lower—perhaps because of exclusions or credits—you could be due a refund.
Refundable Tax Credits
Some tax credits can result in a refund even if you don’t owe any US tax. One of the most common refundable credits for expats is the Additional Child Tax Credit.
If you have qualifying children with valid US Social Security numbers and meet the income requirements, you may be eligible for the Child Tax Credit (CTC). The non-refundable portion of the credit reduces your US tax liability, while the Additional Child Tax Credit (ACTC) is the refundable portion, meaning you may receive a refund even if your tax liability is zero.
However, expats need to meet specific criteria to qualify. For example:
- You must have earned income (wages or self-employment income)
- Your child must be a US citizen with a valid SSN
- You must meet residency and presence requirements
Also, if you exclude all of your foreign income using the Foreign Earned Income Exclusion (Form 2555), you may not qualify for the refundable portion. In many cases, using the Foreign Tax Credit (Form 1116) instead allows you to keep your earned income in the calculation and still qualify for the refund.
Tax Treaties and Pension Withholding
Some expats have US tax withheld from retirement income, Social Security, or other sources. In some cases, the US has tax treaties with other countries that exempt certain income from US taxation. If you’re taxed in error, you may be eligible for a refund by filing a return and claiming treaty benefits.
Can I Still Get a Refund if I Pay Taxes Abroad?
Yes. If you paid foreign taxes on your income—such as income tax in the country you live in, you may qualify for the Foreign Tax Credit (Form 1116). This credit reduces your US tax liability. If your US tax owed is fully eliminated by the credit, but you had US tax withheld during the year, you could still receive a refund.
However, Foreign Tax Credits are not refundable, so they can only reduce your tax to zero, they won’t generate a refund by themselves unless you had excess US tax withheld.
Common Scenarios Where Expats Receive a Refund
- You worked for a US employer remotely and had taxes withheld but qualified for the Foreign Earned Income Exclusion
- You had children abroad and qualified for the Child Tax Credit
- You received US pension payments with withholding, but tax treaty provisions reduce or eliminate the tax
- You paid taxes in both countries, but your US tax liability is zero due to credits, and your withholdings were more than you owed
What if I haven’t filed in years?
Many expats fall behind on their US tax filings. The good news is that the IRS offers the Streamlined Filing Compliance Procedures, which allow eligible Americans abroad to catch up without penalties.
Under the streamlined program, you can file your last 3 years of tax returns and 6 years of FBARs. If you’re due a refund on those prior-year returns, you can still receive it—as long as the return is filed within the 3-year statute of limitations.
How do I receive a refund while living abroad?
You don’t need a US address to receive a refund. The IRS can send your refund by:
- Direct deposit (only into US bank accounts)
- Check by mail (can be mailed to a foreign address, though delays are common)
Some expats open US bank accounts specifically to receive refunds faster.
Make sure the mailing address or direct deposit info on your tax return is correct.
Important Reminders
- Refunds can only be issued if your tax return is filed. If you don’t file, you won’t get a refund—even if you’re owed one.
- The IRS will not deposit refunds into foreign bank accounts. A US bank account is usually the easiest option.
- Refunds for prior years are only available if filed within 3 years of the original due date.
So, do expats qualify for US tax refunds? Absolutely—if you’ve overpaid, qualify for refundable credits, or are eligible for treaty benefits, a refund is possible. The key is understanding how your US and foreign income interact and filing the correct forms on time.
If you think you may be owed a refund, or just want to make sure you’re filing correctly, feel free to contact Universal Tax Professionals. We specialize in helping Americans living abroad prepare their US tax returns and claim any refunds they’re entitled to. Whether you’re filing for the first time in years or need help understanding how to qualify for the Child Tax Credit or Foreign Earned Income Exclusion, our team can guide you through the process.
