For US citizens and green card holders in Israel

US Taxes for Americans Living in Israel

Moving to Israel does not end your US tax filing. Here is what Americans living there file each year, how the treaty and the social security rules between the two countries work, and what to do about missed years.

US returnFBARForm 8938Treaty: yesTotalization: no

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Quick answer

Do US citizens living in Israel have to file US taxes?

Yes. The US taxes citizens and green card holders on worldwide income wherever they live. Living in Israel gives an automatic extension to June 15, accounts there above US$10,000 in total need an FBAR, and the foreign tax credit or the foreign earned income exclusion (US$132,900 for 2026) usually prevents double tax. The US has an income tax treaty with Israel, and there is no social security agreement.

Prepared by Illuminous Accounting · Sources checked November 11, 2026

At a glance

Yearly US return: Yes, on worldwide income; due June 15 automatically when living abroad
US tax treaty with Israel: Yes, per the IRS list (saving clause applies to US citizens)
Social security agreement: No, per the SSA list
Accounts in Israel: FBAR above US$10,000 in total; Form 8938 above higher limits
Behind on filing: Streamlined: 3 years of returns, 6 years of FBARs

US filing duty for Americans in Israel

A US passport or green card keeps you in the US tax system after a move to Israel. The IRS expects a return covering income from everywhere, including your Israeli salary or business income, in US dollars (IRS Pub 54).

Timing is a little kinder abroad: if you live and work outside the US on April 15, the filing date moves automatically to June 15, and an extension request takes it to October 15. Tax paid after April 15 still carries interest, so a payment estimate is worth making early.

Reporting Israeli bank and investment accounts

Two separate reports cover money held in Israel, and many Americans there need both.

Report	Who files	When
FBAR (FinCEN Form 114)	Foreign accounts above US$10,000 in total at any time in the year	April 15, automatic extension to October 15 (IRS)
Form 8938	Living abroad: above US$200,000 at year end or US$300,000 at any time if single; US$400,000 / US$600,000 if married filing jointly	With the tax return; US$10,000 penalty if not filed (IRS)

Pension and savings products in Israel can be reportable too, so we list every account before deciding what goes where.

Is there a US tax treaty with Israel?

The US has an income tax treaty with Israel (IRS treaty list), but US treaties contain a saving clause: they generally do not reduce US tax for US citizens, with specific exceptions written into each treaty (IRS Pub 54). So the treaty helps at the edges, for example with pensions or the order of tax credits, while the main relief comes from the exclusion or the credit.

Tool	What it does	Watch for
Foreign earned income exclusion	Excludes up to US$130,000 (2025) or US$132,900 (2026) of foreign earned income	Only earned income; does not reduce self-employment tax (Pub 54)
Foreign tax credit	Credits income tax paid in Israel against US tax on the same income	Works best where the local tax is at least as high as the US tax

We run the figures both ways before choosing. More in FEIE vs foreign tax credit.

Catching up on US filings

Catching up is usually possible without penalties. The Streamlined Foreign Offshore Procedures ask for 3 years of returns and 6 years of FBARs, with any tax and interest paid, and for eligible people living outside the US the penalties for late returns, information returns and FBARs do not apply (IRS). Eligibility turns on non-willful conduct and on meeting the non-residency test while in Israel. See Streamlined filing.

Your Israeli return and ours

Americans in Israel include dual citizens, tech employees with stock options, and families with Israeli pension and study funds.

We prepare the US side only. Your Israeli tax return stays with a local adviser in Israel, and we can work from the figures on that return so both sides match.

How we help

Gurleen Kaur, CPA licensed in British Columbia and Washington State, prepares and signs US returns for Americans living in Israel: the yearly return with the exclusion or credit, FBAR and Form 8938, and Streamlined catch-up. Every engagement starts with a fixed written quote after we review the file. See the yearly filing package.

Treaty and law references: the US and Israel

Treaty and social security

The IRS lists the 1975 income tax treaty. General effective date (IRS Table 3): treaty Jan. 1, 1995 (IRS treaty documents for Israel; treaty text; IRS Table 3).
Saving clause: Article 6 (General Rules of Taxation), which lets the United States tax its citizens as if the treaty had not come into effect, apart from listed exceptions.
Article 26 (Relief from Double Taxation), on relief from double taxation.
Article 20 (Private Pensions and Annuities) and Article 21 (Social Security Payments), on pensions and social security.
Article 17 (Dependent Personal Services), on employment income.
Social security: no US agreement with Israel appears on the SSA list.

US law

Foreign earned income exclusion: Code section 911 (IRS Form 2555 instructions).
Foreign tax credit: Code section 901 (IRS Pub 54).
Form 8938: Code section 6038D and Treas. Reg. section 1.6038D (IRS Form 8938 instructions).
FBAR: 31 USC 5314 and 31 CFR 1010.350 (IRS Internal Revenue Manual 4.26.16).
Green card holders and residency: Code section 7701(b) (IRS Pub 519).

The tax rules of Israel also apply to you there; a local adviser covers that side.

Common questions

Do I have to file US taxes if I live in Israel?

Yes. US citizens and green card holders file a US return on worldwide income wherever they live. Living in Israel on April 15 gives an automatic extension to June 15, and tax paid in Israel or the foreign earned income exclusion often reduces the US tax to little or nothing.

Does the US-Israel tax treaty stop double taxation?

Partly. The treaty exists, but its saving clause lets the US tax its own citizens as if there were no treaty, with listed exceptions. The main relief is the foreign tax credit or the foreign earned income exclusion.

Do I pay social security in both the US and Israel?

It can happen. There is no US social security agreement with Israel, and self-employed Americans owe US self-employment tax even when they use the foreign earned income exclusion.

What if I never filed US taxes while living in Israel?

If it was not willful, the Streamlined Foreign Offshore Procedures let you file 3 years of returns and 6 years of FBARs, and eligible people living abroad do not pay the usual failure-to-file, information return or FBAR penalties.

Sources

Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.

Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.

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