US Expat Taxes for Americans Living in Saint Kitts and Nevis – What You Need to Know
It has been estimated that there are several thousand Americans living in Saint Kitts and Nevis.
Living in Saint Kitts and Nevis is an incredible experience for a number of reasons, including the friendly locals, the climate and beaches, and the quality of life. As an American expatriate living in Saint Kitts and Nevis though, what exactly do you need to know regarding filing US expat (and St Kitts and Nevisian) taxes?
All US citizens and green card holders who earn a minimum of around $10,000 (or just $400 for self-employed individuals) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where they live or their income is generated.
The good news is if you are paying income tax in Saint Kitts and Nevis, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
US taxes – what you need to know
If you earn over US$10,000 (or just $400 of self-employment income), wherever the income originates in the world you have to file IRS form 1040.
While any US taxes due are still due by April 15th, expats get an automatic filing extension until June 15th, which can be extended further on request until October 15th.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
“St. Kitts-Nevis has no PIT (Personal Income Tax); however, there are a variety of other taxes that must be paid by resident individuals or a group of individuals.”
While most expats won’t pay any income tax in Saint Kitts and Nevis, they can reduce their US tax liability by claiming the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a St Kitts and Nevisian resident. Remember though that even if you don’t owe any tax to the IRS, if your income is over US$10,000 (or $400 if you’re self-employed) you still have to file a federal return.
St Kitts and Nevisian banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you’re a US citizen, green card holder, or US/St Kitts and Nevisian dual citizen, and you have been living in Saint Kitts and Nevis but you didn’t know you had to file a US tax return, don’t worry: there’s a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don’t delay though, in case the IRS comes to you first.
St Kitts and Nevisian taxes – what you need to know
St Kitts and Nevisian has no income tax, however residents who work in Saint Kitts and Nevis pay social security taxes on their income, which can be up to 10% or 12% of income. Other taxes include a small property tax, a land and shares transfer tax, VAT, and business taxes. There is also a flat ‘Unincorporated Business Tax’ of 4% paid for by anyone who carries on business on the islands if the business isn’t registered there.
Residency (and citizenship) in Saint Kitts and Nevis is achieved by investing in approved property on the islands.
St Kitts and Nevisian tax returns only need be filed by residents paying Business Taxes (including Unincorporated Business Tax). For further information contact the St Kitts and Nevisian tax authority at Inland Revenue Department.
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Saint Kitts and Nevis that you contact a US expat tax specialist.