Hilo

Salary from a foreign employer or fees from foreign clients

Taxed10%–37% federal progressive, plus 15.3% self-employment tax for freelancers and 0%–13.3% state tax (plus 3.876% in New York City)

Residents pay federal income tax on salary from a foreign employer and fees from foreign clients at 10%–37%, after a 2026 standard deduction of $16,100 ($32,200 for a joint return). The catch for anyone not yet resident: all pay for work physically done in the US is US-source income, whoever pays it and wherever it is paid. The only domestic exception is a non-resident working for a foreign employer with no US trade or business who is in the US 90 days or less in the year and earns $3,000 or less for that work. A tax treaty can exempt a non-resident's salary when they stay no more than 183 days in any 12-month period and the pay is not from a US-resident employer or borne by a US permanent establishment (the rule in Article 14 of the US Model treaty), but each treaty's wording, and its treatment of freelance fees, needs checking. Self-employed residents owe 15.3% self-employment tax (12.4% social security on earnings up to $184,500 in 2026, 2.9% Medicare) on net earnings of $400 or more, plus 0.9% Additional Medicare tax above $200,000 ($250,000 joint); non-residents owe none unless a totalization agreement puts them in the US system. Employees working in the US are generally liable for social security and Medicare tax (6.2% plus 1.45% each from employee and employer); whether a foreign employer without US payroll handles this is a real compliance gap to check, and a totalization agreement with your home country may keep you in its system instead. Residents credit foreign income tax paid on the same income. States tax residents on top: nothing in Texas or Florida, up to 13.3% in California and 10.9% in New York State, plus New York City's 3.876%. Working while on a visitor status is also an immigration problem (see the visa note).

On the nomad visa

The US has no digital nomad or remote-work visa. Most visitors come under the Visa Waiver Program (up to 90 days) or on a B-1/B-2 visitor visa, which are for business or tourism only: visitors may not take local employment or labor for hire, and no official guidance authorises living in the US while working remotely for a foreign employer, so doing so is an immigration risk. Tax follows physical presence: pay for work done in the US is US-source income even before you become resident, and 183 days in one year makes you a resident taxed on worldwide income.

Dividends, interest, gains, rent and pensions from abroad

Taxed0%/15%/20% on long-term gains and qualified dividends; interest, short-term gains, rent and pensions at 10%–37%; plus 3.8% NIIT at high incomes

Residents are taxed on worldwide dividends, interest, capital gains, rent and pensions, with a credit for foreign tax on the same income. In 2026 long-term capital gains (assets held over a year) and qualified dividends pay 0% up to $49,450 of taxable income for a single filer ($98,900 joint), 15% up to $545,500 ($613,700 joint) and 20% above; interest, short-term gains, rent and foreign pensions are ordinary income at 10%–37%. The 3.8% Net Investment Income Tax applies to investment income above a modified AGI of $200,000 single or $250,000 joint (not indexed), and not to non-resident aliens. State income tax applies on top in most states (none in Texas or Florida). Two catches for people arriving with foreign savings: foreign mutual funds and ETFs that mainly hold investments generally meet the passive foreign investment company (PFIC) tests, so a sale or excess distribution is taxed as ordinary income with an extra tax and interest charge for earlier years unless you made a QEF or mark-to-market election, with Form 8621 each year. And residents must report foreign accounts on FinCEN Form 114 (FBAR) when their total exceeds $10,000 at any time in the year, plus foreign financial assets on Form 8938 above $50,000 at year-end or $75,000 at any time for a single filer living in the US ($100,000 or $150,000 joint). Before you become resident, only US-source investment income is taxed: 30% (or a lower treaty rate) on US dividends, and capital gains are taxed at 30% only if you were in the US 183 days or more that year.

Net wealth and inheritance

No wealth taxInheritance tax applies

There is no federal wealth tax. The federal estate and gift tax (rates up to 40%) applies to people domiciled in the US, citizen or not, with a combined exemption of $15,000,000 per person for 2026, set by the 2025 budget law and indexed for inflation from 2027. Gifts up to $19,000 per recipient a year ($194,000 to a spouse who is not a US citizen) do not use it. For estate tax, residence means domicile, not the income-tax day count. Non-residents who are not citizens are taxed only on US-situs assets (US real estate, tangible property in the US and US securities; bank deposits not used in a US business are excluded), and the estate must file once those exceed just $60,000, a threshold not indexed for inflation; an estate or gift tax treaty can change this. Some states add their own estate tax with far lower thresholds, for example New York at $7,350,000 for 2026 deaths. Receiving a gift is not income, but gifts from a foreign individual totalling over $100,000 in a year must be reported on Form 3520, with penalties for late filing. Property tax is levied locally (counties, cities and school districts), not federally, and varies widely: Texas has no state property tax, yet its average effective rate on homes was 1.66% of value in 2020, among the highest in the country.

Tax resident after

183 days a year

Top income tax rate

51.78%

When you become tax resident

A non-citizen is a US tax resident for a calendar year if they hold a green card at any time in the year (green card test) or meet the substantial presence test: at least 31 days in the US this year and 183 days counting all days this year, 1/3 of last year's days and 1/6 of the days the year before. Any part of a day counts; days as an exempt individual (for example an F or J student, or a J teacher) do not. So 183 days in one year makes you resident at once, and about 122 days every year does so from the third year. Even if you meet the test, you stay non-resident under the closer connection exception if you were present fewer than 183 days that year, kept a tax home in one foreign country all year with a closer connection to it, took no steps toward a green card, and file Form 8840. A treaty tie-breaker (permanent home, then centre of vital interests, then habitual abode) can also make a dual resident non-resident for income tax, claimed on Form 1040-NR with Form 8833. Residence normally starts on your first day in the US in the year you qualify, so the arrival year is a dual-status year. US citizens are taxed on worldwide income wherever they live, so none of these tests matter for them.

Top income tax rate

New York City, 2026: 37% federal on taxable income above $640,600 single ($768,700 joint), plus New York State's 10.9% once income exceeds $25,000,000 and New York City's 3.876% (the top city rate, from $50,000 single), for 51.776%, rounded to 51.78%, above $25,000,000. The 2025 budget law (One Big Beautiful Bill Act) made the 10%–37% federal rate table permanent. Not counted: the 3.8% NIIT on investment income and the 0.9% Additional Medicare tax on earnings. Across the country the top rate runs from 37% in states without income tax, such as Texas and Florida, to 50.3% in California (13.3%: 12.3% plus a 1% Behavioral Health Services Tax on taxable income over $1,000,000) and 51.78% in New York City.