Moving back to the US: the return checklist for taxes, health insurance and credit

Coming back to the States is easier than leaving, but your last expat tax year, your first 60 days of health coverage and your thin credit file all need a plan.

The short version

• Your return year is a split tax year. You may still claim the foreign earned income exclusion for part of it, but only if you meet the residence or 330-day test [2].
• Pick your state on purpose. You become a resident of the state you move to, and it taxes you from then on. Some states have no income tax at all.
• Moving to the US from abroad qualifies you for a Special Enrollment Period on the ACA marketplace [4]. You don't need prior US coverage to use it [5].
• Your US credit file may be thin. Pull your reports early and start rebuilding before you rent, borrow or finance a car.
• Foreign accounts you keep stay reportable. The FBAR still applies above USD 10,000, and the Form 8938 threshold drops sharply once you live in the US [3].

Your taxes in the year you move back

Federal: the last expat return

You'll file one return for the year you come back, covering both the time abroad and the time in the US. Here's the fine print:

• The foreign earned income exclusion only applies to income earned while your tax home was abroad. You still need to pass the bona fide residence test or the physical presence test of 330 full days outside the US in a 12-month period [2]. Under the physical presence test, that 12-month window can start in the year before you return, which helps people who come back mid-year.
• If you won't meet a test by the filing date, Form 2350 lets you ask for an extension until 30 days after you expect to qualify [2].
• The foreign tax credit still works for foreign taxes on income from your time abroad. Your host country may also tax you on its own exit rules.
• The automatic June 15 extension only applies if you live abroad on the regular due date [1]. If you're back in the US by April 15, your normal deadline is April 15, or October 15 with Form 4868.

A US expat tax preparer can check your situation, especially if you're coming home with foreign pensions, a foreign home to sell or shares in an employer abroad.

Choosing your state

States tax their residents on worldwide income. Your first state return will usually be a part-year return. Things to settle before you sign a lease, whether that's in Austin or Albany:

Reporting rules once you're home

The thresholds for Form 8938 drop once you live in the US [3]:

The FBAR threshold stays the same: file FinCEN Form 114 if your foreign accounts total more than USD 10,000 at any time in the year, by April 15 with an automatic extension to October 15 [3].

Closing or keeping foreign accounts

You don't have to close everything. A foreign account is handy if you'll go back often, have family there or still receive a foreign pension. But each account you keep means more paperwork every spring.

1. List every foreign account, including pensions, insurance policies with cash value and employer share plans.
2. Decide what to keep. Keep one everyday account if you'll need it; close dormant ones.
3. Be careful with foreign funds. Foreign mutual funds and ETFs are often PFICs, with brutal US tax rules. Selling them can trigger tax; holding them means annual Form 8621 filings. Get advice before you sell.
4. Move money home in planned amounts. Large transfers are normal, but your US bank may ask where the money came from. Keep statements that show it's your savings.
5. Close accounts in writing and keep the final statements. You'll still report the account on your FBAR for the year you close it.
6. Update your address with any foreign bank you keep. Some will close accounts held by non-residents anyway.

Health insurance from day one

The ACA marketplace

Moving to the US from a foreign country or a US territory is a qualifying life event for a Special Enrollment Period [4]. For most moves, you need to have had qualifying coverage for at least one day in the 60 days before the move. That rule doesn't apply if you lived in a foreign country or a US territory for at least one day in the 60 days before moving [5]. In practice, you can usually enroll within 60 days of arriving.

Steps that work:

1. Keep your expat or international plan running until your new coverage starts. Don't cancel it the day you land at JFK.
2. Apply at HealthCare.gov or your state's own marketplace once you have a US address.
3. Have proof of the move ready, such as a lease, and proof you lived abroad, such as a foreign lease or residence permit. The marketplace may ask for documents before coverage can be used [5].
4. Pay the first premium. Coverage starts based on when you pick a plan, and only once your eligibility is confirmed and you've paid [5].
5. Estimate your income carefully. Premium tax credits depend on projected household income for the year in the US.

If you're starting a job, employer coverage is usually simpler. Ask HR when it kicks in; there may be a waiting period that your marketplace plan or expat plan has to cover.

Outside special enrollment, marketplace Open Enrollment runs November 1 to January 15 [4].

Medicare if you're 65 or older

If you dropped or never took Part B while abroad, returning doesn't create a special enrollment window on its own. You'll usually sign up in the General Enrollment Period, January 1 to March 31, with coverage starting the month after you enroll. The late penalty is an extra 10% of the Part B premium for each full year you could have had Part B but didn't, and it's usually permanent [6]. Our Medicare guide covers the trade-offs.

Rebuilding your US credit

Years abroad can leave you with a thin or stale US credit file. Old accounts that were closed fall off over time, and your foreign credit history doesn't transfer. That matters for apartments, car loans, mortgages and even some cell phone plans. Expect a little sticker shock on deposits at first.

1. Pull your reports from all three bureaus at AnnualCreditReport.com, the official free site. Fix errors and old addresses.
2. Use the cards you kept. If you kept a US card open while abroad, keep using it and paying it in full.
3. Open a secured card if your file is empty. After several months of on-time payments, many issuers move you to a regular card.
4. Ask to be added as an authorized user on a family member's well-managed card.
5. Set up autopay on everything. One missed payment hurts more on a thin file.
6. Bring evidence for landlords: foreign bank statements, an employment letter and references. Some landlords will take a larger deposit instead of a strong score.

Your things, your car and your documents

• Household goods. Used household goods can usually come back without duty. CBP Form 3299 asks you to declare them; items bought abroad must have been used in your household abroad for at least a year to qualify [7]. List alcohol, tobacco and anything for sale separately [7].
• Pets. Check CDC and USDA import rules for dogs and cats before you book.
• Driver's license. If yours expired abroad, many states need a written test, and some a road test, to reissue. Budget a morning at your new state's DMV.
• Social Security and voting. Update your address with the SSA and register to vote at your new address. Your old FPCA registration won't move with you.
• Children. Bring transcripts, vaccination records and, for kids born abroad, the Consular Report of Birth Abroad.
• Partners. If you're coming home with an Australian partner who wants to work stateside, our sister site ExpatCooee explains the E-3 visa for Australians working in the US, one route some Australians use.

A 90-day plan

If you want to hear how others handled reverse culture shock and the first months back, our community groups for Americans abroad include plenty of people who've done it.

Sources

1. US citizens and resident aliens abroad, IRS
2. Publication 54, Tax Guide for US Citizens and Resident Aliens Abroad, IRS
3. Comparison of Form 8938 and FBAR requirements, IRS
4. Special Enrollment Period, HealthCare.gov
5. Special enrollment periods available to consumers, CMS
6. Avoid late enrollment penalties, Medicare.gov
7. CBP Form 3299, Declaration for Free Entry of Unaccompanied Articles, US Customs and Border Protection

Keep reading

• Keeping your US credit score alive from abroad
• State taxes after you move abroad
• PFICs: why foreign funds hurt Americans
• Health insurance between countries