Accidental Americans and the US Exit Tax
Most accidental Americans do not owe the exit tax, because their wealth and income fall well below the thresholds. The real danger is the certification test: years of unfiled US returns can make you a covered expatriate by default. Get compliant first, and the exit tax usually disappears.
An accidental American is a US citizen by birth or parentage who has little real connection to the country, often someone who left as an infant or was born to a US parent abroad. The US taxes them on worldwide income anyway, which is why so many want to formally renounce. The good news: the exit tax rarely bites them. The bad news: a paperwork gap can change that.
Why the wealth tests usually do not apply
The net-worth test (2,000,000) and the income-tax test (211,000 for 2026) are high bars. A typical accidental American living an ordinary life abroad clears neither, so on those two tests alone they are not covered, and there is no exit tax to pay.
Below both wealth tests = not covered
The certification trap
Here is where accidental Americans get caught. The third test makes you covered if you cannot certify five years of US tax compliance on Form 8854. Many accidental Americans never filed US returns at all, because they did not know they had to. Renouncing without fixing that turns a low-net-worth person into a covered expatriate by default.
Unfiled years = covered until you fix it
The fix: get compliant, then renounce
The standard route is to become compliant before renouncing, often through a streamlined filing procedure designed for non-willful non-filers abroad. Once you can sign the five-year certification truthfully, you renounce as a non-covered expatriate and avoid the exit tax entirely. Read the broader options in how to reduce the exit tax.
The dual-citizen exception may also help
Many accidental Americans were citizens of the US and another country at birth. If you still hold and are taxed by that other country and were a US resident for no more than 10 of the last 15 years, the dual-citizen exception can keep you out of covered status even if you somehow exceeded a wealth test. You still must certify compliance.
Estimate your own position in the exit tax calculator, and see the current cost to renounce, now lower at $450.
Sources: IRS expatriation guidance; Form 8854 instructions. See sources.