US Taxes for Digital Nomads: Filing From Anywhere

2026-07-09

Last reviewed: July 9, 2026. This article reflects current IRS rules and EA exam requirements as of this date.

Digital nomads create unique tax situations. You're not a resident of any single foreign country. You may not qualify for the FEIE's bona fide residence test (you're not a resident anywhere). You may or may not qualify for the physical presence test (you need 330 days outside the US in a 12-month period).

The FEIE Challenge

The Foreign Earned Income Exclusion requires you to establish:

Bona fide residence: You're a resident of a foreign country for an uninterrupted period that includes a full tax year. If you're moving between countries every few months, you may not qualify. The IRS looks at your intention to remain, the nature of your living arrangements, and your ties to the foreign country.
Physical presence: You're outside the US for 330 full days in a 12-month period. Days in transit over international waters do not count — you must be physically present in a foreign country. A digital nomad who spends 280 days abroad and 85 days visiting family in the US fails the physical presence test.
Tax home: Your tax home must be in a foreign country. If you don't have a regular place of business, your tax home is your place of abode. If your place of abode is unclear or itinerant, your tax home may be in the US — which disqualifies you from the FEIE entirely.

State Residency Risk

If you maintain a US address, driver's license, voter registration, or bank account — especially in a state with aggressive residency enforcement like California, New York, or Virginia — you may still be considered a state resident. State tax residency is separate from federal tax residency. You could qualify for the FEIE at the federal level while still owing state income tax.

States that are especially aggressive about residency: California, New York, Virginia, South Carolina, New Mexico. States that are easier on expats: Texas, Florida, Washington, Nevada (no income tax), and South Dakota (explicitly expat-friendly).

Self-Employment Tax

If you're self-employed, you pay self-employment tax (Social Security and Medicare) on your net earnings — 15.3% up to the Social Security wage base. The FEIE excludes your income from income tax but not from self-employment tax. You pay SE tax on your net earnings even if the FEIE eliminates your income tax.

The exception: if you're covered by a foreign social security system under a totalization agreement, you may be exempt from US self-employment tax. The US has totalization agreements with 30 countries, including Canada, UK, Germany, France, Spain, Australia, Japan, and the Netherlands. You need a certificate of coverage from the foreign country to claim the exemption.

The Filing Strategy

Determine FEIE eligibility — bona fide residence or physical presence test
If the FEIE is unavailable, determine FTC eligibility — you can claim FTC even without FEIE
Identify your state tax situation and consider establishing residency in a no-tax state before departing
Determine self-employment tax exposure and totalization agreement eligibility
Evaluate whether foreign bank accounts trigger FBAR and FATCA reporting

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