As a US tax resident, do I pay US tax on income from abroad?

Checked on 2026-10-25

Yes. The IRS says US tax residents are generally taxed like US citizens: worldwide income is subject to US tax and must be reported, including wages, interest, dividends, rent and royalties earned outside the United States. Nonresidents are taxed only on US-source income and income connected with a US business.

Key facts

What	IRS guidance says	Source
How residents are taxed	Generally in the same way as US citizens	IRS, Taxation of U.S. resident aliens
What is taxed	Worldwide income: it is subject to US tax and must be reported on the US return	IRS, Taxation of U.S. resident aliens
Which income	Interest, dividends, wages or other pay for services, rental income, royalties and other income, earned within or outside the US	IRS, Taxation of U.S. resident aliens; Publication 519, ch. 2
Rates	The graduated rates that apply to citizens (Form 1040 tax tables and rate schedules)	IRS, Taxation of U.S. resident aliens
Nonresidents, for comparison	Only US-source income and certain income connected with a US trade or business	Publication 519, ch. 2
Tax already paid abroad	May be taken as a credit or an itemized deduction, if you are also subject to US tax on the same income	IRS, Foreign tax credit

Residents are taxed like citizens

The IRS says that once you are a US tax resident (by green card or the substantial presence test), your income is generally taxed the same way as a US citizen’s. You must report all interest, dividends, wages, other compensation, rental income, royalties and other income, whether it was earned in the US or abroad. Whether you are a resident is a separate question, decided by the residency tests.

Residents can use the same filing statuses as citizens, and the IRS says you can claim the same deductions as citizens if you are a resident for the entire tax year. For tax years after 2017, nobody can claim personal exemptions.

Nonresidents are taxed differently

Publication 519 says nonresidents are taxed only on income from sources within the US and on certain income connected with a US trade or business. In the year you arrive, you may be a nonresident for part of the year and a resident for the rest (a dual-status year).

Tax paid to another country on the same income: the IRS says you may be able to take a foreign tax credit (Form 1116) or an itemized deduction (IRS, Foreign tax credit).

Sources

IRS: Taxation of U.S. resident aliens checked 2026-10-25
IRS Publication 519 (2025), U.S. Tax Guide for Aliens, chapter 2 (Source of Income) checked 2026-10-25
IRS: Foreign tax credit checked 2026-10-25

Change history

2026-10-25: Page created

This is general information, not legal advice, and Lumen is not a law firm. Rules change and offices differ: check the official sources above before you act. Found something wrong or out of date? Write to support@lumen.observer.