The cost to renounce U.S. citizenship starts at a $450 government fee, but that number rarely tells the whole story. For anyone with meaningful assets, income, or unfiled tax returns, the exit tax can turn a $450 transaction into a six-figure event. Add professional fees, travel to a U.S. embassy abroad, and ongoing tax consequences that follow you after you give up the passport, and the real price varies enormously from one person to the next.
The $450 State Department Fee
As of April 13, 2026, the State Department charges $450 to process a Certificate of Loss of Nationality.1Federal Register. Schedule of Fees for Consular Services – Fee for Administrative Processing of Request for Certificate of Loss of Nationality of the United States That replaced a $2,350 fee that had been in place since 2015. The lower amount is a return to the pre-2015 level, not a new discount.
The fee is flat and non-refundable. It applies whether you have $10,000 or $10 million to your name. During rulemaking, commenters requested a means-tested fee or hardship waiver; the State Department declined. People who paid $2,350 before the reduction do not get the difference back.1Federal Register. Schedule of Fees for Consular Services – Fee for Administrative Processing of Request for Certificate of Loss of Nationality of the United States You pay it at the embassy or consulate abroad when you take the oath of renunciation.
The Exit Tax: The Biggest Variable
The largest potential cost is not the fee. It’s the expatriation tax, and whether you owe it depends on whether you are a “covered expatriate.”
Who Counts as a Covered Expatriate
You are a covered expatriate if any one of these applies:
- Your net worth is $2 million or more on your expatriation date.
- Your average annual net federal income tax for the five years before expatriation exceeds $211,000 (the 2026 threshold).2Internal Revenue Service. Revenue Procedure 2025-32
- You fail to certify on Form 8854 that you have met all federal tax obligations for the five years before expatriation.3Internal Revenue Service. Expatriation Tax
The third prong is where non-wealthy people get caught. If you have unfiled returns or skip the certification, you become a covered expatriate by default, no matter what your net worth is.
How the Tax Is Calculated
For covered expatriates, federal law treats all your property as if you sold it for fair market value the day before you expatriate.4Office of the Law Revision Counsel. 26 USC 877A – Tax Responsibilities of Expatriation You didn’t actually sell anything, but the IRS taxes the unrealized gain as if you had. For 2026, the first $910,000 of net gain is excluded.2Internal Revenue Service. Revenue Procedure 2025-32 Anything above that is taxed at the capital gains rate that would have applied to a real sale.
A rough example: if your total unrealized gains come to $2 million, the first $910,000 is excluded and you owe capital gains tax on $1,090,000. At a 20% long-term rate, that’s roughly $218,000 in federal tax, before adding the 3.8% net investment income tax if it applies. The actual figure depends on your income bracket and the character of each asset.
Some assets don’t get the mark-to-market treatment. Deferred compensation such as pensions and unvested stock options, tax-deferred accounts, and interests in nongrantor trusts are handled separately. Future distributions to a covered expatriate are hit with 30% withholding at the time of payment.4Office of the Law Revision Counsel. 26 USC 877A – Tax Responsibilities of Expatriation For deferred compensation that isn’t eligible for withholding, the present value of the accrued benefit is treated as distributed the day before expatriation and taxed then.
Form 8854 and the $10,000 Penalty
Everyone who renounces has to file Form 8854 (Initial and Annual Expatriation Statement) with the IRS for the year of expatriation.3Internal Revenue Service. Expatriation Tax The form notifies the IRS of your status change and certifies five years of federal tax compliance. It’s the document that determines whether you avoid covered expatriate status under the compliance prong.
Failing to file the form, filing it late, or submitting it with incomplete or incorrect information triggers a $10,000 penalty.5Office of the Law Revision Counsel. 26 USC 6039G – Information on Individuals Losing United States Citizenship The IRS may waive it for reasonable cause but is not required to. Worse, missing the certification pushes you into covered expatriate status automatically, which can bring the full exit tax down on you even when your net worth and income are nowhere near the thresholds.
A Cost That Follows You: Tax on Gifts and Bequests
Being a covered expatriate creates a tax burden that outlasts the renunciation itself, and it lands on your U.S. family rather than on you. If a covered expatriate gives money or leaves property to a U.S. citizen or resident, the recipient owes tax on amounts above $19,000 per year (the 2026 annual gift exclusion).6Office of the Law Revision Counsel. 26 USC 2801 – Imposition of Tax7Internal Revenue Service. Gifts and Inheritances The rate is the highest federal estate tax rate, currently 40%. Any gift or estate tax paid to a foreign country on the same transfer reduces the amount owed.
Every future gift or inheritance to a U.S. relative carries that tax for the rest of your life and beyond. For someone with U.S. children or grandchildren, this is often the sleeper cost of covered expatriate status.
Ongoing Costs After You Renounce
Some financial consequences don’t hit at the moment of renunciation but keep costing you money afterward.
Social Security Payments Abroad
Renouncing doesn’t erase Social Security benefits you already earned, but collecting them gets harder. The Social Security Administration generally cannot pay retirement, survivors, or disability benefits to noncitizens after six consecutive calendar months outside the United States.8Social Security Administration. Social Security Payments Outside the United States To restart suspended payments, you have to return to the U.S. and stay lawfully present for a full calendar month.
Totalization agreements with certain countries provide an exception. If you are a citizen of an agreement country and reside there, you can continue to receive benefits.9Social Security Administration. International Agreements The list is limited, so check it before renouncing if benefits matter to your retirement plan.
Withholding on U.S. Income
As a nonresident alien, U.S.-source income that isn’t connected to a U.S. business is subject to a flat 30% withholding tax with no deductions.10Internal Revenue Service. Taxation of Nonresident Aliens That covers dividends from U.S. companies, pension distributions, rental income, and similar payments. A tax treaty between the U.S. and your new country of residence may lower the rate. Without a treaty, the full 30% applies year after year on income you keep receiving from U.S. sources.
Attorneys, Tax Advisors, and Travel
Most people who renounce hire at least one professional. Immigration attorneys who handle expatriation cases typically charge between $5,000 and $25,000. A simple case with modest assets sits near the bottom of that range. A complex portfolio with deferred compensation, trust interests, and overseas holdings pushes toward the top or past it.
Tax advisors specializing in expatriation are a separate line item. If you are anywhere near covered expatriate territory, professional tax planning before you renounce is usually worth what it costs. A mistake on Form 8854 doesn’t just risk the $10,000 penalty; it can drop you into covered expatriate status and trigger the entire exit tax.
Travel is easy to overlook. You cannot renounce inside the United States, so you’ll need to reach a U.S. embassy or consulate abroad, and at least two appointments are required. If you don’t already live near a post, budget for the flights and lodging that go with them. Document costs, including birth certificates, marriage records, and certified translations, typically add a few hundred dollars.
Putting the Numbers Together
For someone well under the covered expatriate thresholds, with tax filings in order and no U.S. investments to speak of, the realistic all-in cost is the $450 fee plus travel and perhaps a few thousand dollars for legal help. Under $10,000 is achievable.
For a covered expatriate with significant unrealized gains, the exit tax dominates everything else. A single asset with a large embedded gain can generate a tax bill in the hundreds of thousands. Add $10,000 to $25,000 or more in professional fees, ongoing 30% withholding on any U.S. income you keep receiving, and the potential 40% tax on future gifts to U.S. family, and the true lifetime cost stretches well beyond what shows up on the day you take the oath.