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U.S. Expatriation Tax · IRC §877A · Last verified JUN 2026 · Informational, not tax advice

Green Card Exit Tax: Long-Term Residents

Last verified JUN 2026 IRC §877A Informational, not tax advice
A US green card and Form I-407 abandonment paperwork on a desk

Green card holders face the US exit tax only if they are long-term residents, meaning they held the card in at least 8 of the last 15 tax years. Give up the card before year 8 and the exit tax generally does not apply, no matter your net worth. Cross that line, and the same covered-expatriate tests that apply to citizens apply to you.

The exit tax is usually discussed in terms of citizenship, but it reaches green-card holders through a separate door. The key is one number: 8.

The 8-of-15-years rule

You become a long-term resident once you have been a lawful permanent resident for 8 of the prior 15 tax years. Any part of a year in which you held the card counts as a full year, so someone who got a green card in late one year and gives it up early in year 8 can already be over the line. Until you reach long-term resident status, abandoning the card is not an expatriation event for exit-tax purposes.

Under 8 years = exit tax does not apply

At or past 8 years = covered tests apply

How Form I-407 triggers expatriation

For a long-term resident, formally abandoning the green card by filing Form I-407, or having the status revoked, is the expatriation event. From that date the mark-to-market rules of IRC §877A apply exactly as they would for a citizen who renounces, and you file Form 8854 with a final dual-status return.

The treaty-election trap

There is a subtle trap for green-card holders who spend time in a treaty country. If you claim to be a nonresident of the US under a treaty tie-breaker, that claim can both count toward the 8-year long-term-resident clock and, in some cases, be treated as an expatriation event itself. Review any treaty position with an advisor before filing, because an innocent-looking election can start the exit-tax machinery.

Reducing the exposure

The most reliable strategy is timing: decide whether to keep the card well before year 8. After that, the same tools as citizens apply, including managing net worth below the $2,000,000 threshold and using the residency-date basis step-up for assets you owned before becoming a US person. See how to legally reduce the exit tax and estimate your position in the calculator.

Sources: IRC §877(e) and IRS expatriation guidance. See sources.

Frequently asked questions

Do green card holders pay the US exit tax?
Only long-term residents do. You are a long-term resident if you held a green card in at least 8 of the last 15 tax years. If you give up the card before reaching that 8-year mark, the exit tax generally does not apply, regardless of your net worth.
Who is a long-term resident for exit tax?
A long-term resident is a lawful permanent resident (green card holder) for at least 8 of the prior 15 tax years. Any part of a year counts as a year, so the count can be reached sooner than people expect.
How does Form I-407 trigger the exit tax?
Filing Form I-407 to formally abandon your green card is an expatriation event for a long-term resident. From that point the same covered-expatriate tests and mark-to-market rules apply as for a citizen who renounces.
How can green card holders avoid the exit tax?
The cleanest route is timing: abandon the card before you become a long-term resident at year 8. After that, the same planning options as citizens apply, such as managing net worth and gains, and using the residency-date basis step-up for assets owned before you became a US person.
Does a treaty tie-breaker affect the exit tax?
It can. Claiming nonresident status under a tax treaty tie-breaker while holding a green card can count toward long-term resident status and may itself be treated as an expatriation event. This treaty-election trap should be reviewed with an advisor before you file.
This article is general information about US tax law, not tax or legal advice. Figures are for the years stated and may change. Confirm your situation with a qualified CPA or tax attorney before acting.