Americans in New Zealand

U.S. taxes for Americans in New Zealand: what to file, and how to catch up.

Americans in New Zealand often came for work or family and stayed for the lifestyle, and all of them still file a U.S. return every year. New Zealand tax usually covers the U.S. bill on wages. The traps are KiwiSaver and New Zealand funds, which the IRS sees very differently. Most people who fell behind can catch up under the Streamlined procedures, with no penalty if they qualify.

Reviewed by Lewis Grunfeld, CPA

Get help from New Zealand

New Zealand tax yearApril – March

NZ return dueJuly 7, if required

Usual U.S. toolForeign tax credit

FATCA dataShared by New Zealand authorities

Tax treatyYes

Sound familiar?

You’re enrolled in KiwiSaver through work.
You pay PAYE through work and assumed that covered everything.
You moved for a partner and never looked into U.S. filing.
Your New Zealand bank asked about your U.S. citizenship.

How does the IRS treat KiwiSaver and other New Zealand accounts?

Every one of these goes on your FBAR. What differs is how the IRS taxes them.

Account	U.S. treatment
KiwiSaver	Not a U.S. retirement account. It could be treated as a foreign trust, the funds inside are usually PFICs, and growth may be taxable.	Watch out
NZ Super	Under the treaty, only New Zealand can tax it, even for U.S. citizens.	Usually fine
New Zealand funds and PIEs	Usually PFICs (Form 8621), with complex reporting and tax rules.	Watch out
Bank accounts	Interest is taxable for the U.S., and the accounts count toward your FBAR total.	Taxable
U.S. investments, in NZ eyes	New Zealand can tax U.S. shares and funds you own under its FIF rules, on a deemed return, while the U.S. taxes actual dividends and gains.	Plan ahead
Selling your home	New Zealand may not tax the gain, but the U.S. can. The U.S. can exclude up to $250,000 of gain on your main home ($500,000 for couples).	Plan ahead

Which New Zealand investments are PFICs?

New Zealand managed funds, PIEs (portfolio investment entities), the funds inside KiwiSaver, and ETFs listed on the NZX. For U.S. tax they’re passive foreign investment companies, or PFICs.

Each fund needs its own Form 8621 in most years, and gains can be taxed at the top U.S. rate plus an interest charge, unless an election was made in time.
PIE tax is low and final in New Zealand, but it’s paid by the fund, so there’s often little to credit against the U.S. tax.
Not PFICs: shares of individual companies on the NZX, New Zealand government bonds, and bank deposits.

What does the U.S.–New Zealand tax treaty actually say?

The treaty was signed in 1982 and updated by a protocol in 2008. For Americans living in New Zealand, these parts matter most:

The saving clause. The U.S. can tax its citizens as if the treaty didn’t exist, except for the provisions the treaty lists.
Social security. NZ Super is taxed only by New Zealand, even for U.S. citizens, and U.S. Social Security only by the U.S.
Relief from double tax. The U.S. gives a credit for New Zealand income tax on the same income.
KiwiSaver isn’t covered, which is why its U.S. treatment is unsettled.

There’s no U.S.–New Zealand social security agreement, so a self-employed American generally owes U.S. self-employment tax. Read the U.S.–New Zealand tax treaty on IRS.gov.

Two NZ tax years, one U.S. return

U.S. returns run January to December, and the New Zealand tax year runs 1 April to 31 March. So each U.S. return covers part of two NZ tax years, and we work out which income and which tax belong to which U.S. year, using your payslips and Inland Revenue records.

One U.S. year, two NZ tax years

U.S. tax year: January to DecemberNZ year to 31 MarchNZ year from 1 April

Three months of each U.S. year fall in one NZ tax year, and nine in the next.

	New Zealand	United States
Tax year	1 April to 31 March	January to December
Annual return	July 7, if you have to file one; most employees are assessed automatically	April 15, moved to June 15 automatically when you live abroad, or October 15 with an extension
Paying the tax	PAYE from your salary, with any balance due the following February	April 15, even if you file later
Foreign accounts	Foreign income and FIF investments go on the NZ return	The FBAR, due October 15, filed online

Foreign tax credit or exclusion: which wins in New Zealand?

Usually the foreign tax credit. New Zealand tax reaches 39%, so tax on a professional salary is normally close to or above the U.S. tax on it, and the unused credit carries forward for up to 10 years.

The exclusion, up to $130,000 for 2025, can suit lower salaries, where New Zealand tax may be less than the U.S. tax.
Families with children often keep the credit, because it allows the refundable part of the U.S. child tax credit, up to $1,700 per child for 2025.
U.S. investments can be taxed by both countries on different bases, New Zealand on a deemed return and the U.S. on actual income, which takes care to line up.

We run your returns both ways before choosing. How we compare the exclusion and the credit.

A worked example: a designer in Wellington

Ashley moved to Wellington in 2016 to be with her partner. She earns NZ$110,000, is in KiwiSaver with her employer contributing, and still has a U.S. brokerage account from before she left. She hasn’t filed a U.S. return since the move.

Item	How it’s handled
Salary	New Zealand tax is higher than the U.S. tax on it, so with the foreign tax credit her U.S. tax on it is $0. Her NZ tax is split across the U.S. years.
KiwiSaver	On the FBAR. The funds inside are PFICs, and how the account itself is treated is unsettled, so we explain the options before filing.
U.S. brokerage account	Dividends and gains go on her U.S. return as usual; New Zealand may also tax it under the FIF rules.
Catching up	Three years of returns and six FBARs under the Streamlined procedures, with no penalty if she qualifies.

Catching up from New Zealand

Most Americans in New Zealand who fell behind without meaning to can catch up under the Streamlined Foreign Offshore Procedures: three years of returns, six years of FBARs and, if you qualify, no penalties. If only FBARs are missing, or you’ve moved back to the U.S., another route may fit better. See every IRS catch-up option for expats, compared.

Common questions

Do I pay U.S. Social Security tax in New Zealand?

Usually not if you work for a New Zealand employer. There’s no U.S.-New Zealand social security agreement, though, so self-employment tax can still apply if you work for yourself, and FICA if you work for a U.S. company.

Will the U.S. tax my U.S. Social Security in New Zealand?

The U.S. taxes it as usual. Under the treaty, New Zealand can’t.

Should I stay in KiwiSaver?

Often the employer contributions make it worth keeping, but it adds U.S. reporting and tax. We’ll show you the U.S. cost of staying in versus the alternatives.

Is NZ Super taxed by the U.S.?

No. Under the treaty, only New Zealand can tax it, even though you’re a U.S. citizen.

How do you handle the April tax year?

U.S. returns use the calendar year, so we split your New Zealand income and tax between the two U.S. years using your payslips and Inland Revenue records. It’s routine for us.

New Zealand taxes my U.S. shares. Does that help my U.S. return?

It can. New Zealand tax under the FIF rules could count toward the U.S. foreign tax credit, but it’s calculated differently from U.S. tax on the same shares, so we match them carefully.