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Digital Nomad Visas & US Taxes: What You Need to Know
A digital nomad visa changes where you are allowed to live. It does not change who taxes you. That single distinction is behind most of the expensive mistakes I see as an Enrolled Agent working with Americans in Colombia and across Latin America — and the visa marketing pages are not going to explain it to you.
Does a digital nomad visa change your US tax status?
No. A visa is an immigration document issued by another country. It grants you the legal right to enter and remain there for a stated purpose. It has no effect whatsoever on your status as a US taxpayer.
If you are a US citizen or a green-card holder, the United States taxes you on your worldwide income no matter where you live, how long you have been gone, or what visa you hold. That obligation ends only if you formally expatriate — renouncing citizenship or surrendering long-term permanent residence — which is a specific legal process with its own tax consequences, not something that happens by moving away.
So a Colombian digital nomad visa does not reduce, defer, or waive your US filing requirement. What it can do — and this is the part worth planning around — is help you qualify for the exclusions and credits that reduce the US tax you actually pay.
What actually determines whether you have to file a US return?
For a US citizen or green-card holder, it comes down to income, not location and not days. If your gross income for the year exceeds the filing threshold for your filing status — the same threshold that applies to Americans living at home — you file. Self-employed? The bar is far lower: net self-employment earnings of $400 or more require a return, full stop.
It is worth clearing up a common confusion here. The substantial presence test and the closer connection exception, which count your days inside the United States, are rules for determining whether a foreign national becomes a US tax resident. They do not apply to citizens or green-card holders. If you are already a US person, counting days will not get you out of the filing requirement — no number of days abroad ends it.
Owning a house in the US, or having family there, does not by itself create or remove a federal filing obligation either. Those facts matter enormously for state residency, which is a separate problem covered below.
Separately, if your foreign financial accounts together exceeded $10,000 at any point during the year — even for a single day, even if the money was just passing through — you have an FBAR (FinCEN Form 114) to file. That threshold is an aggregate across all accounts, and it catches almost every nomad who opens a local bank account.
How does a nomad visa affect the Foreign Earned Income Exclusion?
The Foreign Earned Income Exclusion (FEIE, claimed on Form 2555) lets qualifying Americans exclude foreign earned income from US federal income tax — up to $130,000 for tax year 2025 and $132,900 for tax year 2026. It applies to earned income: wages and self-employment income from work you perform abroad. It does not cover dividends, interest, capital gains, rental income, or pension income.
Two separate tests can qualify you, and most nomads should understand both:
The Physical Presence Test is purely mechanical. You need 330 full days outside the United States in any rolling 12-month period. It does not care what visa you hold or whether you ever established a home anywhere. For genuinely mobile nomads, this is usually the reliable test.
The Bona Fide Residence Test asks whether you actually established residence in a foreign country for an uninterrupted period that includes an entire tax year. This is a facts-and-circumstances judgment: the nature and length of your stay, your housing, your ties to the community, your intent.
Here is where a nomad visa can quietly hurt you. Under IRC 911(d)(5), if you submit a statement to the authorities of the country you live in claiming that you are not a resident there, and they treat you as not subject to their income tax on that basis, you cannot be a bona fide resident of that country for FEIE purposes. A number of digital nomad visa programs are built on exactly that arrangement — they market local tax exemption as a feature. Accepting it can cost you the bona fide residence route entirely, leaving the 330-day count as your only path. Know which one you are relying on before you sign anything.
One more piece that gets overlooked: the foreign housing exclusion. On top of the FEIE, qualifying taxpayers can exclude a portion of their foreign housing costs, subject to a base amount and a location-specific ceiling — the general limitation is $39,870 for 2026, with higher caps in designated high-cost cities. For expats paying real rent abroad, this is money most self-prepared returns leave on the table.
Does the FEIE eliminate self-employment tax?
No, and this is the single most expensive misunderstanding in expat tax. The FEIE excludes income from federal income tax only. It does nothing to self-employment tax, which runs 15.3% on net self-employment earnings — 12.4% Social Security plus 2.9% Medicare. A freelancer abroad can exclude every dollar of income under the FEIE and still owe thousands in SE tax.
The relief that does exist comes from a totalization agreement — a bilateral Social Security treaty that assigns you to one country's system instead of both. The United States has agreements with 31 countries. Colombia is not one of them. If you are self-employed and living in Colombia, there is no treaty to exempt you, and the SE tax is simply owed. Whether an entity structure is the right answer to that is a planning conversation, and it turns on facts specific to you.
Which state tax traps does a nomad visa not solve?
Leaving the country does not automatically end your state residency, and states are considerably more aggressive about this than the IRS. Your former state can keep taxing you until you have genuinely severed residency under its own rules.
California is the one that catches the most people. California taxes residents on worldwide income and non-residents on California-source income — so rent from a California property remains taxable to California regardless of where you live. California does offer a safe harbor under R&TC section 17014(d): an individual who is outside the state under an employment-related contract for an uninterrupted period of at least 546 consecutive days is generally treated as a non-resident. It is a real safe harbor, but it is narrow, it requires an uninterrupted period, and it is lost if intangible income exceeds $200,000 in any tax year within the period.
New York works differently and is widely misdescribed. New York statutory residency requires two things together: maintaining a permanent place of abode in New York and spending more than 183 days in the state during the year. Days alone do not make you a resident, and giving up the apartment matters as much as the calendar does.
The practical lesson is the same in every state: document the move. Close accounts, change your licence and registrations, move your mail, and keep evidence of where you actually were.
What do visa marketing pages leave out?
Visa marketing pages sell the benefits — streamlined entry, permission to work remotely, sometimes a local tax exemption. What they consistently omit is that none of it touches your US obligations.
Becoming a Colombian resident does not release a US citizen from filing with the IRS. And it adds obligations rather than removing them: US persons abroad still report foreign financial accounts on the FBAR when the $10,000 aggregate threshold is crossed, and may separately owe Form 8938 under FATCA, which has its own — higher, and different — thresholds. Two forms, two rulebooks, two sets of penalties.
The other omission is the host country itself. Spend more than 183 days in Colombia within any 365-day period and you become a Colombian tax resident, taxed on worldwide income, with rates reaching 39%. At that point the interesting question is no longer whether to claim the FEIE, but whether the FEIE or the Foreign Tax Credit produces the better outcome across both systems — because income you exclude under the FEIE cannot also generate a foreign tax credit, and revoking a FEIE election locks you out of it for five years. That decision deserves actual analysis, not a default.
What should you actually plan around?
Start with the qualification test you intend to use, and build the year around it. If you are relying on the Physical Presence Test, 330 full days is a hard number — track travel days deliberately, because a few careless trips home can break it.
If you own US rental property, get the depreciation right. A residential rental located in the United States is depreciated over 27.5 years under the General Depreciation System, and that does not change because the owner moved abroad. The Alternative Depreciation System applies to property used predominantly outside the United States — a rental you own in Medellín, not a duplex in Ohio. For foreign residential rental property, ADS uses a 30-year recovery period if it was placed in service after 31 December 2017, and 40 years if before. Applying the wrong system in either direction misstates every year of deductions until someone catches it.
On the Colombian side, if you become a tax resident you will need to register with the DIAN and obtain a RUT (Registro Único Tributario), the Colombian tax identification registry. That registration — not a complaints channel — is the mechanism for being properly on file. Requirements and deadlines change, so confirm current rules with a Colombian accountant before you act.
Finally, plan the two systems together rather than one at a time. The FEIE-versus-credit question, the SE tax exposure, the state residency question, and your Colombian filing all interact. Optimising any one of them alone is how people end up paying twice.
Frequently Asked Questions
Do I need to file a US return if I have a digital nomad visa?
Yes. US citizens and green-card holders file based on worldwide income regardless of visa or country of residence. The obligation ends only through formal expatriation.
What is the FEIE limit for 2025 and 2026?
The maximum Foreign Earned Income Exclusion is $130,000 for tax year 2025 and $132,900 for tax year 2026. It applies to earned income only, and it does not reduce self-employment tax.
How do I depreciate a rental property while living abroad?
A US-located residential rental uses the General Depreciation System over 27.5 years no matter where you live. The Alternative Depreciation System applies to property located outside the United States — 30 years if placed in service after 31 December 2017, 40 years if before.
Does a nomad visa help me qualify for the FEIE?
It can support a bona fide residence claim — but if the visa grants you non-resident status for local tax purposes and you claim it, IRC 911(d)(5) blocks bona fide residence. The 330-day Physical Presence Test remains available either way.
Talk to an Enrolled Agent
All State Tax Resolution is one of the top expat accounting practices for US taxpayers living abroad in Latin America. Cross-border returns are where inexperience gets expensive — a missed exclusion, a botched election, or a late information return can cost tens of thousands of dollars, and several of these penalties start at $10,000 before anyone calculates a dollar of actual tax.
This article is general information, not individual tax advice. To talk through your own situation, book a free 20-minute review, or call or text us directly.
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