Moving to the Philippines doesn't end your relationship with the IRS. The United States taxes its citizens on worldwide income no matter where they live, so even if you never set foot in the US again, you'll likely still need to file US taxes from the Philippines every year.
The good news: most Americans in the Philippines end up owing little or no US tax, provided they file correctly and use the exclusions and credits available. Here's how it works.
Who has to file US taxes from the Philippines?
You must file a US return if your worldwide income is above the normal filing threshold for your status. That's the same threshold as if you lived in the US. This applies to:
- US citizens (including dual US–Philippine citizens)
- Green card holders, even if living abroad
Living in the Philippines, being paid in pesos or having no US income does not exempt you.
Deadlines are slightly different abroad
- April 15: official due date, and interest on any tax owed starts running from here.
- June 15: automatic two-month extension to file if you're living abroad on April 15. You don't need to request it, but attach a statement explaining you qualify.
- October 15: further extension available by filing Form 4868.
Tool 1: the Foreign Earned Income Exclusion (FEIE)
The FEIE (Form 2555) lets you exclude foreign earned income from US tax, up to $130,000 for 2025 and $132,900 for 2026.
You qualify under one of two tests:
- Physical presence test: you're physically outside the US for at least 330 full days in any 12-month period.
- Bona fide residence test: you're a genuine resident of the Philippines for an entire tax year (visa type, lease or home, local ties and intent all count).
What the FEIE does not cover
This trips people up. The FEIE only applies to earned income: wages, salary and self-employment income for work performed while in the Philippines. It does not exclude:
- Social Security (see our guide to receiving Social Security in the Philippines)
- Pensions, 401(k) and IRA distributions
- Interest, dividends and capital gains
- Rental income
If you're a retiree living on those income sources, the FEIE won't help you. Your US tax picture looks much like it would back home.
Tool 2: the Foreign Tax Credit
If you pay Philippine income tax, the Foreign Tax Credit (Form 1116) lets you offset it against US tax on the same income. For Americans earning Philippine-source income (for example employees of a Philippine company with a 9(g) work visa), the credit can be more valuable than the FEIE. The Philippine top income tax rate is currently 35%, higher than many US brackets.
You generally can't claim both the FEIE and the Foreign Tax Credit on the same income. A tax professional can model which works out better for you.
Self-employed? Watch for self-employment tax
The FEIE reduces income tax, but not US self-employment tax (Social Security and Medicare, about 15.3%). Some countries have a "totalization agreement" with the US that prevents double social-security tax. The Philippines does not.
So if you're a freelancer or remote business owner living in the Philippines, you'll usually still owe US self-employment tax even if your income tax is zero.
Our take: Remote freelancers are the group most often surprised by a US tax bill. Budget about 15% of net self-employment income for SE tax, even if the FEIE wipes out your income tax.
FBAR: reporting your Philippine bank accounts
If the combined balance of all your foreign financial accounts exceeds $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114).
- It's filed online with FinCEN, separately from your tax return.
- "Foreign accounts" includes Philippine bank accounts, GCash/Maya wallets with significant balances (seek advice), time deposits, and joint accounts with a Filipino spouse.
- Due April 15, with an automatic extension to October 15.
FBAR is an information return. It doesn't cost tax, but the penalties for failing to file can be severe. If you've opened accounts here (see our guide to opening a bank account in the Philippines), track your peak balances.
FATCA: Form 8938
Separately, Form 8938 reports specified foreign financial assets on your tax return. For taxpayers living abroad the thresholds are higher than for US residents: roughly $200,000 at year-end or $300,000 at any time for single filers, and double that for joint filers. There's overlap with the FBAR, but they're different forms and you may need both.
How Philippine tax fits in
The Philippines taxes resident foreigners on Philippine-source income only. So:
- A US pension, Social Security or US investment income: generally not taxed in the Philippines.
- Salary from a Philippine employer: taxed in the Philippines (claim the Foreign Tax Credit in the US).
- Remote work for US clients while living here: a grey area. The location where work is performed can matter. See our guide to working legally in the Philippines and get local advice.
- Rental income from Philippine property: taxed in the Philippines.
Behind on filing? There's a way back
Many Americans abroad simply didn't know they had to file. The IRS Streamlined Foreign Offshore Procedures let non-wilful taxpayers catch up, typically by filing three years of returns and six years of FBARs, often without penalties. Get it done before the IRS contacts you.
Don't forget state taxes
Some US states (notably California, Virginia, New Mexico and South Carolina) can keep treating you as a resident after you move abroad if you keep ties such as a driver's licence, property or voter registration. Formally cut state residency when you move.
Checklist
- Confirm your filing requirement and extension date (June 15)
- Decide between FEIE and Foreign Tax Credit for earned income
- Budget for self-employment tax if freelancing
- Track peak balances in all Philippine accounts (FBAR)
- Check Form 8938 thresholds
- Sever state tax residency
- Behind? Look into the Streamlined Procedures
This article is general information, not tax advice. US expat tax is complex and depends on your individual circumstances, so consult a qualified US tax professional or enrolled agent.