US citizens and resident aliens generally face US worldwide-income rules. Mexican tax residence is assessed separately under the home and center-of-vital-interests rules. Credits or exclusions can provide relief, but do not automatically remove filing duties.
In this guide
Start with two separate residence assessments
A Mexican residence card and an RFC are administrative facts, not a complete tax-residence test. Article 9 of Mexico's Federal Tax Code examines a person's home. When the person also has a home in another country, the center of vital interests becomes relevant, including the statutory income-source and principal professional-activity criteria.
There is no universal Mexican “183 days and you are resident” shortcut. A stay length alone cannot replace the legal analysis. Mexican-source income can also create obligations for a nonresident. Keep dates, home arrangements, work locations and income records for the assessment. See Article 9 and the Income Tax Law.
US citizens and resident aliens generally remain subject to US tax rules on worldwide income, with filing requirements determined under those rules. Do not assume that moving abroad ends US federal or relevant state obligations.
Compare exclusion and credit rules
| Mechanism | What it addresses | Important limitation |
|---|---|---|
| Foreign earned income exclusion — Form 2555 | Eligible foreign earned income for qualifying taxpayers | Qualification tests and an annually adjusted limit apply |
| Foreign tax credit — commonly Form 1116 | Eligible foreign income taxes under credit rules | Source, income category, timing and limitation rules apply |
| Tax treaty | Specific income and double-tax-relief provisions | Saving-clause and eligibility provisions must be examined |
Swipe or scroll sideways to compare all columns.
The FEIE is not a general exclusion for pensions, dividends or other passive income. It also does not automatically eliminate self-employment tax. Review the IRS FEIE guidance.
A foreign tax credit is not a promise that every Mexican payment will erase a US liability dollar for dollar. The same tax on excluded income cannot simply be claimed again as a credit. Compare the treatment of each income category using IRS Publication 54.
Read the treaty for the actual income
The US–Mexico treaty includes provisions that can affect taxing rights and relief. Its saving clause means that treaty protection is not a blanket exemption for US citizens. Pensions, government pensions, employment, business income and investments can receive different treatment.
Use the IRS treaty documents with an adviser who can reconcile both returns. Do not infer your pension treatment from another retiree's experience.
FBAR and Form 8938 are separate filings
An FBAR may be required when a US person's foreign financial accounts exceed USD 10,000 in aggregate at any time during the calendar year, subject to the applicable account and reporting rules. It is filed with FinCEN, not attached as an income-tax form. The standard April 15 due date has an automatic extension to October 15. Verify the current FBAR instructions.
Form 8938 covers specified foreign financial assets and is filed with the federal income-tax return when required. For taxpayers qualifying as living abroad, the IRS lists thresholds above USD 200,000 at year-end or USD 300,000 during the year for those not filing jointly; joint thresholds are higher. Qualification and exceptions matter. Consult the IRS FATCA summary.
Filing one does not automatically satisfy the other. A bank's FATCA reporting is also separate.
Prepare a coordinated annual file
Collect income statements, Mexican tax receipts, exchange-rate records, foreign-account maxima, entity interests and prior elections. Record the tax year to which each payment relates. Ask which US and Mexican returns, information filings and payments apply, and keep their deadlines in one calendar.
For an owner-managed business, review the LLC guide. Entity classification and where work is performed can affect both countries' analysis. For local banking, use the account checklist.
Frequently asked questions
Does spending 183 days in Mexico settle tax residence?
No universal rule of that kind determines Mexican residence. Assess the home and center-of-vital-interests criteria and any applicable treaty provisions.
Can I use the FEIE for a pension?
The FEIE applies to qualifying foreign earned income, not a general pension or investment-income exemption. Review the specific income treatment.
Do I need both FBAR and Form 8938?
Possibly. They have different asset definitions, thresholds and filing routes. Evaluate each separately even if your bank reports the account.
Sources and scope
Federal Tax Code, Income Tax Law, IRS Publication 54, FEIE, US–Mexico treaty, FBAR and Form 8938 thresholds.
Editorial review: October 7, 2026. Requirements depend on the applicable authority, route and facts. Confirm the current procedure and obtain advice for your individual situation.