ACA and U.S. Tax Filing Rules for Expats in 2026

• Dan O'Donnell
• February 24, 2025
• 6 min read

Americans living abroad should separate health coverage questions from U.S. income tax filing requirements. For 2025 and 2026, the federal individual shared responsibility payment is zero. You do not need to claim a federal ACA coverage exemption on Form 8965 for these years.

Do expats need an ACA exemption?

The federal penalty for not maintaining minimum essential coverage has been zero since 2019. Older guidance about Form 8965 and overseas coverage exemptions applies to earlier tax years and should not be used to prepare a current return.

State rules can differ. If you remain a resident of a state with a coverage requirement, check that state’s residency and exemption rules. Moving abroad does not automatically end every state tax obligation. Our state tax extension requirements can help you identify filing procedures.

What about Marketplace tax credits?

Do not assume that living abroad or claiming the foreign earned income exclusion makes you eligible for a Marketplace premium tax credit. You must satisfy Marketplace residence and enrollment rules and the tax credit’s separate conditions.

Foreign earned income excluded from taxable income is added back when calculating household income for the premium tax credit. Other coverage can also affect eligibility. If advance credits were paid, review Form 1095-A and Form 8962 reconciliation and IRS Publication 974.

U.S. income tax obligations continue

U.S. citizens and resident aliens generally report worldwide income when they meet the applicable filing requirements. The foreign earned income exclusion and foreign tax credit are separate provisions with their own tests. Neither is an ACA exemption, and living overseas does not automatically eliminate the need to file.

Foreign account and asset reporting may also apply independently of whether income tax is owed. Refer to the IRS guide for U.S. citizens and resident aliens abroad.

2026 deadlines for 2025 individual returns

The normal calendar-year deadline was April 15, 2026. Qualifying taxpayers living outside the United States and Puerto Rico whose main place of business or post of duty is abroad, and qualifying military personnel abroad, generally receive an automatic two-month extension to June 15, 2026. Include the required statement explaining your qualification.

This automatic extension can cover filing and payment, but interest generally runs from April 15 on unpaid tax. A timely Form 4868 can provide additional filing time to October 15, 2026; it does not eliminate payment obligations or interest. Other relief may apply to combat-zone service or declared disasters.

Keep coverage and tax records together

Retain foreign income statements, tax payments, residence and travel records, insurance policies, and any U.S. Marketplace forms. Form 1095-B is generally kept with your records rather than attached to your federal return. If you need additional filing time, review the personal tax extension process before your applicable deadline.