Who is subject to the Exit Tax?

This tax applies to those who meet any of these conditions:

• Your annual net income tax liability for the prior five years was greater than a specified amount, adjusted for inflation ($162,000 for 2017, $165,000 for 2018, and $168,000 for 2019), or
• Your net worth is $2 million or more (including the present value of any pension) on the date of your expatriation or termination of residency, or
• You fail to certify on Form 8854 that you have met US tax law requirements for the 5 years preceding the date of your expatriation or termination of residency.

If any of these rules apply, you are considered a “covered expatriate” and are subject to the Exit Tax.