Spanish taxes for Americans: how Hacienda and the IRS fit together

Live in Madrid and you'll answer to two tax offices: Spain's Agencia Tributaria (everyone calls it Hacienda) and the IRS. Spanish rates are high enough that the US bill often shrinks to zero, but you still file both.

The short version

• Spain taxes you on worldwide income once you're a tax resident: more than 183 days in Spain in a calendar year, your main center of economic interests in Spain, or a spouse and minor kids living here [1].
• Madrid's combined state and regional income tax (IRPF) starts around 18% and tops out at 45% above EUR 300,000 of taxable income. Madrid's regional top rate, 20.5%, is the lowest in Spain [2].
• The 2025 Spanish return was due June 30, 2026 (June 25 if you paid by direct debit) [3]. Your US return is due June 15 for Americans abroad, extendable to October 15 [8].
• The US–Spain tax treaty dates from 1990. A protocol signed in 2013 finally took effect on November 27, 2019 [4][5].
• The Social Security (totalization) agreement has been in force since April 1, 1988, so you don't pay into both systems on the same work [6].

USD conversions use the Federal Reserve H.10 rate of October 30, 2026: EUR 1 = USD 1.1163.

When Spain considers you a tax resident

Spain doesn't care about your passport. Under Article 9 of the IRPF law, you're a Spanish tax resident for the year if any of these apply [1]:

1. You spend more than 183 days in Spain during the calendar year. Sporadic absences count as days in Spain, so a two-week trip home for Thanksgiving doesn't break your count.
2. Spain is the main base of your business or economic interests, directly or indirectly.
3. Your spouse (not legally separated) and your minor children live in Spain. That creates a presumption that you're resident too, which you can try to disprove.

Spain's tax year is the calendar year, and residence generally applies to the whole year. In practice, many Americans who move in the first half of the year are Spanish residents for that entire year, while someone arriving in, say, September usually isn't until the next one. The exact count matters, so keep your boarding passes. If you have a home in both countries, the treaty's tie-breaker rules can decide which one counts as your residence.

Non-residents still pay Spanish tax on Spanish-source income, like rent from a Spanish apartment, through a separate non-resident return.

IRPF: what Madrid's rates look like

The IRPF (Impuesto sobre la Renta de las Personas Físicas) has two halves: a state scale and a regional scale. Madrid's regional rates are lower than most of Spain's. Selected points on the combined general scale for 2025 and 2026 income [2]:

Between those points, rates step up gradually. This is a marginal-rate table, like the IRS brackets, so only the income in each band is taxed at that rate. Personal and family allowances reduce the bill, and investment income (interest, dividends, capital gains) goes in a separate savings base with its own, lower scale.

Employees have IRPF withheld from each paycheck. You'll get a NIE (your foreigner tax number) when you get residence; see our NIE and TIE guide.

Two special topics

• The Beckham law. Newcomers who move to Spain for a job, or on some digital nomad and entrepreneur routes, may be able to elect a special regime taxed largely like a non-resident for several years. It has strict deadlines. See The Beckham law: Spain's special tax regime.
• Modelo 720 and wealth taxes. Spain has its own foreign asset reporting (think of it as Spain's FBAR) and wealth taxes that can reach Americans with big US portfolios. See Modelo 720 and Spain's wealth taxes for Americans.

Filing your Spanish return

The Spanish return is Modelo 100, filed in the spring after the tax year. For the 2025 tax year, the AEAT opened online filing on April 8, 2026, and the deadline was June 30, 2026, or June 25 if you wanted the payment taken by direct debit [3]. Expect the 2026 return on a similar spring timetable in 2027.

Not everyone with a modest salary from one employer has to file, but many do anyway to claim refunds and deductions. If you have US income, foreign accounts or self-employment, you'll almost certainly file. Hacienda's online system prepares a draft (borrador) from data it already holds, but it won't know about your US income. You need to add that yourself.

Your US return from Madrid

The IRS taxes citizens on worldwide income wherever they live, so Form 1040 still comes due every year [8].

• Deadlines: living abroad on April 15 gets you an automatic extension to June 15, and Form 4868 can push it to October 15. Interest on any tax owed still runs from April 15 [8].
• Foreign tax credit (Form 1116): most Americans in Madrid with Spanish salaries claim a credit for Spanish income tax paid. Because Spanish rates are often higher than US rates, the credit usually wipes out the US tax on that income, with excess credits to carry forward.
• Foreign earned income exclusion (Form 2555): you can exclude up to USD 130,000 of earned income for 2025 and USD 132,900 for 2026 [9]. On a non-lucrative visa, your income is mostly unearned (pensions, dividends), so the exclusion doesn't help much.
• FBAR: report your Spanish accounts on FinCEN Form 114 if they total more than USD 10,000 at any time in the year. It's due April 15 with an automatic extension to October 15 [10].
• Form 8938: for Americans living abroad, the threshold is USD 200,000 at year-end or USD 300,000 at any time if you file single, and double that for joint filers [10].

Timing trips people up. Spain's deadline (end of June) comes after the US June 15 date, so you may file your US return with an estimate of Spanish tax and amend it later, or extend to October. A US expat tax preparer can check your situation.

The treaty and its 2019 protocol

The US–Spain income tax treaty was signed in Madrid on February 22, 1990 [4]. A protocol signed in 2013 sat in limbo for years and finally entered into force on November 27, 2019 [5]. It cut withholding taxes on many cross-border payments, such as interest, royalties and some dividends, and tightened the rules on who can claim treaty benefits. The IRS publishes the treaty, the protocol and the technical explanations [4].

Like every US treaty, it has a saving clause: the US can still tax its own citizens almost as if the treaty didn't exist. For Americans in Madrid, the treaty mostly matters for which country taxes pensions and US-source investment income first, and for how the foreign tax credit gets figured. See Tax treaties and totalization agreements.

The Social Security agreement

The US–Spain totalization agreement took effect on April 1, 1988 [6]:

• Sent by a US employer for five years or less? You can generally stay in US Social Security and skip Spanish contributions [6]. Your employer requests a certificate of coverage.
• Hired locally in Madrid? You pay into Spanish Social Security, not the US system.
• Self-employed? You're generally covered by the country where you live. If you live in Spain, you pay Spanish contributions (as an autónomo), and a Spanish certificate of coverage, requested from the Social Security Treasury (TGSS), lets you skip US self-employment tax [7].

Work credits in both countries can be combined to qualify for a pension. See Social Security abroad.

A yearly rhythm

1. January–March: collect your Spanish employer's annual withholding certificate and your US forms.
2. By April 15: pay any US tax owed, to avoid interest.
3. By June 15: file your US return, or extend.
4. By June 30: file your Spanish Modelo 100.
5. By October 15: file the FBAR and any extended US return.

Want to know how other Americans in Madrid handle two returns? Ask in our community group for Americans in Spain.

Sources

1. Agencia Tributaria: IRPF 2024 practical manual, habitual residence in Spain
2. TaxDown: IRPF brackets in Madrid for Renta 2025/2026
3. Agencia Tributaria: Press release on the start of the Renta 2025 campaign (April 8, 2026)
4. IRS: Spain tax treaty documents
5. BDO: Treasury announces entry-into-force dates for two tax treaty protocols
6. SSA: US international Social Security agreements
7. SSA: Agreement between the United States and Spain
8. IRS: US citizens and resident aliens abroad
9. IRS: Figuring the foreign earned income exclusion
10. IRS: Comparison of Form 8938 and FBAR requirements

Keep reading

• The Beckham law: Spain's special tax regime
• Modelo 720 and Spain's wealth taxes for Americans
• Foreign earned income exclusion vs foreign tax credit
• FBAR: reporting your foreign bank accounts