U.S. taxes for Americans in Norway: what to file, and how to catch up.
Americans in Norway still file a U.S. return every year, but Norwegian tax usually covers the U.S. bill on wages. The details to get right are Norway’s savings accounts and pensions, like the aksjesparekonto and OTP, and Norwegian funds, which the IRS sees differently. Most people who fell behind can catch up under the Streamlined procedures, with no penalty if they qualify.
Sound familiar?
- You moved for work in Oslo, Stavanger or Bergen and stayed.
- You invest through an aksjesparekonto (ASK).
- Your employer pays into an OTP pension for you.
- Your Norwegian bank asked about your U.S. tax status.
How does the IRS treat Norwegian pensions and savings?
Every one of these goes on your FBAR. What differs is how the IRS taxes them.
| Account | U.S. treatment | |
|---|---|---|
| Folketrygd pension | Under the treaty, only Norway can tax it, even for U.S. citizens. | Usually fine |
| OTP (employer pension) | Could be taxable for the U.S. as it builds up, depending on the plan; the rules aren’t settled. | Check first |
| IPS (individual pension savings) | Tax-favored in Norway only. Growth could be taxable for the U.S., and funds inside are usually PFICs. | Check first |
| Aksjesparekonto (ASK) | Tax-deferred in Norway only. For the U.S., dividends and gains are taxable, and funds inside are usually PFICs. | Watch out |
| Norwegian funds | Usually PFICs (Form 8621), with complex reporting and tax rules. | Watch out |
| Wealth tax (formuesskatt) | Not an income tax, so it doesn’t reduce your U.S. tax. | Plan ahead |
Which Norwegian investments are PFICs?
Norwegian funds of every kind, from bank index funds to the funds on Nordnet and other platforms, and European ETFs. For U.S. tax they’re passive foreign investment companies, or PFICs, and that doesn’t change inside an ASK or IPS.
- 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.
- An ASK defers Norwegian tax until you withdraw, but the U.S. taxes the dividends and gains as they happen, so the two countries tax the same income in different years.
- Not PFICs: shares of individual companies on the Oslo exchange, Norwegian government bonds, and bank savings.
What does the U.S.–Norway tax treaty actually say?
The treaty was signed in 1971 and updated by a protocol in 1980. For Americans living in Norway, 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. The folketrygd pension is taxed only by Norway, 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 Norwegian income tax on the same income.
- Employer pensions like OTP don’t get a treaty deferral for U.S. citizens living in Norway, which is why they need checking.
Social security contributions are covered by a separate U.S.–Norway agreement, which generally means you pay into one system, not both. Read the U.S.–Norway tax treaty on IRS.gov.
When are Norwegian and U.S. taxes due?
Both tax years run January to December, so each Norwegian year lines up with one U.S. return. Your pre-filled skattemelding gives most of what the U.S. return needs.
| Norway | United States | |
|---|---|---|
| Tax year | January to December | January to December |
| Annual return | April 30, pre-filled by Skatteetaten | April 15, moved to June 15 automatically when you live abroad, or October 15 with an extension |
| Paying the tax | Withheld from your salary, with any balance after the assessment | April 15, even if you file later |
| Foreign accounts | Foreign assets and income go on the Norwegian return | The FBAR, due October 15, filed online |
Foreign tax credit or exclusion: which wins in Norway?
Usually the foreign tax credit. Norway’s flat 22% income tax plus its stepped bracket tax normally comes to more than the U.S. tax on the same salary, and the unused credit carries forward for up to 10 years.
- The exclusion, up to $130,000 for 2025, is rarely better in Norway, and it gives up the refundable child tax credit.
- Families with children can get the refundable part of the U.S. child tax credit, up to $1,700 per child for 2025, by using the credit.
- The ASK can leave a U.S. bill, because the U.S. taxes its gains years before Norway does.
We run your returns both ways before choosing. How we compare the exclusion and the credit.
A worked example: an engineer in Stavanger
Megan moved to Stavanger in 2015 for an energy company. She earns NOK 950,000, her employer pays into OTP, and she invests monthly in index funds through an ASK. She hasn’t filed a U.S. return since moving.
| Item | How it’s handled |
|---|---|
| Salary | Norwegian tax is higher than the U.S. tax on it, so with the foreign tax credit her U.S. tax on it is $0. |
| OTP | On the FBAR. Contributions and growth could be taxable for the U.S., depending on the plan, so we check it. |
| ASK index funds | PFICs: a Form 8621 for each, with every monthly purchase tracked. |
| Catching up | Three years of returns and six FBARs under the Streamlined procedures, with no penalty if she qualifies. |
Catching up from Norway
Most Americans in Norway 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 Norway?
Generally not if you pay into the Norwegian system. The U.S.-Norway totalization agreement prevents paying into both systems for the same work in most cases.
Will the U.S. tax my U.S. Social Security in Norway?
The U.S. taxes it as usual. Under the treaty, Norway can’t.
How do you handle krone amounts?
We convert using the correct IRS exchange rates for each year and account. It’s routine for us.
Is my folketrygd pension taxed by the U.S.?
No. Under the treaty, only Norway can tax it, even for U.S. citizens.
Should I keep my aksjesparekonto?
It depends on what’s inside. An ASK holding funds can mean Form 8621 every year and U.S. tax Norway doesn’t charge yet. One holding individual shares is far simpler. We’ll show you the U.S. cost.
Does Norwegian wealth tax reduce my U.S. tax?
No. It’s a tax on assets, not income, so it doesn’t count toward the foreign tax credit.
American in Norway? Let's get you caught up.
Answer 3 quick questions and our tax team will review your situation for free.
Get in touch →