{"id":14770,"date":"2026-11-04T00:08:47","date_gmt":"2026-11-04T00:08:47","guid":{"rendered":"https:\/\/novomove.com\/moving-to-portugal-401k-ira\/"},"modified":"2026-11-04T00:08:47","modified_gmt":"2026-11-04T00:08:47","slug":"moving-to-portugal-401k-ira","status":"publish","type":"post","link":"https:\/\/novomove.com\/pt\/moving-to-portugal-401k-ira\/","title":{"rendered":"Moving to Portugal with a 401(k) or IRA: how both countries tax it in 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">If you&#8217;re retiring to Portugal from the US, <strong>most of your savings probably sit in a 401(k) or an IRA.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For years, Portugal&#8217;s NHR scheme taxed those withdrawals at <strong>a flat 10%<\/strong>. Portugal closed it to newcomers from 2024, and its replacement, IFICI, gives pensions nothing at all.<sup class=\"nm-fnref\"><a href=\"#source-7\">[7]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-8\">[8]<\/a><\/sup> Yet pages that still rank for &#8220;401k Portugal&#8221; quote the 10% as if you could sign up tomorrow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So here&#8217;s what really happens to your withdrawals if you move in 2026 or 2027: <strong>who taxes them, in what order, at what rate<\/strong>, and which US rules follow you across the Atlantic.<\/p>\n\n\n\n<div class=\"nm-sum\">\n<style>\n.nm-sum,.nm-flow,.nm-qs,.nm-dep,.nm-cost,.nm-stg{font-family:inherit;margin:34px 0 38px;}\n.nm-sum{background:#FFFBF0;border:1px solid #F2E6BE;border-left:5px solid #F5C518;border-radius:0 18px 18px 0;padding:24px 28px;}\n.nm-k{font-size:12.5px;font-weight:700;letter-spacing:.1em;text-transform:uppercase;color:#8a6d00;margin:0 0 14px;}\n.nm-sum ul,.nm-qs ol{margin:0;padding:0;list-style:none;}\n.nm-sum li{position:relative;padding-left:26px;margin:0 0 11px;font-size:16.5px;line-height:1.55;color:#1B2A4A;}\n.nm-sum li:last-child{margin-bottom:0;}\n.nm-sum li:before{content:\"\";position:absolute;left:4px;top:9px;width:8px;height:8px;border-radius:50%;background:#F5C518;}\n.nm-flow{position:relative;padding-left:4px;}\n.nm-fs{display:grid;grid-template-columns:44px 1fr;gap:0 18px;position:relative;padding-bottom:26px;}\n.nm-fs:last-child{padding-bottom:0;}\n.nm-fs:not(:last-child):after{content:\"\";position:absolute;left:21px;top:46px;bottom:4px;width:2px;background:#E3E7EF;}\n.nm-fn{width:44px;height:44px;border-radius:50%;background:#1B2A4A;color:#F5C518;font-weight:700;font-size:18px;display:flex;align-items:center;justify-content:center;}\n.nm-ft{font-size:17.5px;font-weight:700;color:#1B2A4A;margin:9px 0 5px;line-height:1.35;}\n.nm-fd{font-size:16px;line-height:1.6;color:#3d4c6b;margin:0 0 9px;}\n.nm-chip{display:inline-block;font-size:13.5px;font-weight:600;padding:5px 12px;border-radius:999px;background:#F4F6FA;border:1px solid #E3E7EF;color:#1B2A4A;}\n.nm-chip.g{background:#FFFBF0;border-color:#F2E6BE;color:#8a6d00;}\n.nm-qs{background:#F4F6FA;border:1px solid #E3E7EF;border-radius:18px;padding:24px 28px;}\n.nm-qs .nm-k{color:#5a6b8c;}\n.nm-qs li{display:grid;grid-template-columns:30px 1fr;gap:12px;margin:0 0 14px;font-size:16.5px;line-height:1.5;color:#1B2A4A;font-weight:600;}\n.nm-qs li:last-child{margin-bottom:0;}\n.nm-qs li span{width:30px;height:30px;border-radius:8px;background:#fff;border:1px solid #C9D0DC;color:#00B67A;display:flex;align-items:center;justify-content:center;font-weight:700;}\n.nm-dep{display:grid;grid-template-columns:1fr 1fr;gap:16px;}\n.nm-dc{border:1px solid #E3E7EF;border-radius:16px;padding:20px 22px;background:#fff;}\n.nm-dc.y{background:#1B2A4A;border-color:#1B2A4A;}\n.nm-dc h4{margin:0 0 4px;font-size:18px;color:#1B2A4A;font-family:inherit;}\n.nm-dc.y h4{color:#fff;}\n.nm-dc .w{font-size:13px;font-weight:700;letter-spacing:.06em;text-transform:uppercase;color:#5a6b8c;margin:0 0 12px;}\n.nm-dc.y .w{color:#F5C518;}\n.nm-dc p{font-size:15.5px;line-height:1.55;margin:0;color:#3d4c6b;}\n.nm-dc.y p{color:rgba(255,255,255,.85);}\n.nm-cost{border:1px solid #E3E7EF;border-radius:18px;overflow:hidden;}\n.nm-cost .nm-ch{background:#1B2A4A;color:#fff;padding:18px 24px;font-weight:700;font-size:17px;}\n.nm-cost .nm-ch span{color:#F5C518;}\n.nm-cg{display:grid;grid-template-columns:repeat(4,1fr);}\n.nm-ci{padding:20px 22px;border-right:1px solid #E3E7EF;}\n.nm-ci:last-child{border-right:0;}\n.nm-ci .v{font-size:24px;font-weight:700;color:#1B2A4A;line-height:1.2;}\n.nm-ci .l{font-size:14px;line-height:1.45;color:#5a6b8c;margin-top:6px;}\n.nm-stg{display:grid;grid-template-columns:repeat(5,1fr);gap:10px;counter-reset:s;}\n.nm-sg{background:#F4F6FA;border:1px solid #E3E7EF;border-radius:14px;padding:16px 14px;position:relative;}\n.nm-sg:before{counter-increment:s;content:counter(s);display:flex;width:30px;height:30px;border-radius:50%;background:#F5C518;color:#1B2A4A;font-weight:700;align-items:center;justify-content:center;margin-bottom:10px;}\n.nm-sg b{display:block;font-size:15.5px;color:#1B2A4A;line-height:1.35;margin-bottom:4px;}\n.nm-sg small{font-size:13.5px;line-height:1.45;color:#5a6b8c;display:block;}\n.nm-stg-note{grid-column:1\/-1;font-size:14.5px;color:#5a6b8c;margin-top:4px;}\n.nm-flow p,.nm-qs p,.nm-sum p,.nm-dc p,.nm-cost p{margin-top:0!important;}\n.nm-flow .nm-ft{margin:9px 0 4px!important;}\n.nm-flow .nm-fd{margin:0 0 8px!important;}\n.entry-content ul.wp-block-list,.entry-content ol.wp-block-list{margin:6px 0 26px;padding-left:22px;}\n.entry-content ul.wp-block-list li,.entry-content ol.wp-block-list li{font-size:17px;line-height:1.6;margin:0 0 10px;padding-left:4px;}\n.entry-content ul.wp-block-list li::marker{color:#F5C518;}\n@media(max-width:820px){.nm-dep,.nm-cg{grid-template-columns:1fr 1fr!important;}.nm-stg{grid-template-columns:1fr!important;}.nm-ci:nth-child(2){border-right:0;}.nm-ci:nth-child(-n+2){border-bottom:1px solid #E3E7EF;}}\n@media(max-width:560px){.nm-dep,.nm-cg{grid-template-columns:1fr!important;}.nm-ci{border-right:0!important;border-bottom:1px solid #E3E7EF;}.nm-ci:last-child{border-bottom:0;}.nm-sum,.nm-qs{padding:20px;}}\n<\/style>\n<p class=\"nm-k\">The short version<\/p>\n<ul>\n<li>Once you live in Portugal, <strong>Portugal taxes your 401(k) and IRA withdrawals<\/strong> as pension income, in the year you take them.<\/li>\n<li><strong>The IRS still taxes you too<\/strong>, and the treaty gives you a credit, so you pay roughly the higher of the two countries&#8217; tax.<\/li>\n<li>Portugal&#8217;s 2026 scale runs from <strong>12.5% to 48%<\/strong>, after a pension deduction of <strong>\u20ac4,587 per person<\/strong>.<\/li>\n<li><strong>NHR&#8217;s 10% is closed to newcomers<\/strong>, and IFICI leaves pensions out.<\/li>\n<li>The 10% penalty before 59\u00bd, required minimum distributions and US reporting <strong>all follow you<\/strong>.<\/li>\n<\/ul>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re moving on a D7, the visa side is on our <a href=\"\/portugal-d7-visa-assistance\/#d7-usa\">D7 visa page<\/a>, with a section for American applicants. This post is only about <strong>the tax on your retirement accounts once you live here<\/strong>.<\/p>\n\n\n\n<style>\n.nm-toc{font-family:inherit;margin:30px 0 8px;border:1px solid #E3E7EF;border-left:4px solid #1B2A4A;border-radius:16px;background:#fff;}\n.nm-toc summary{list-style:none;cursor:pointer;display:flex;align-items:center;justify-content:space-between;gap:12px;padding:16px 22px;font-weight:700;font-size:16.5px;color:#1B2A4A;}\n.nm-toc summary::-webkit-details-marker{display:none;}\n.nm-toc summary small{font-weight:600;font-size:13.5px;color:#5a6b8c;margin:0 auto 0 4px;}\n.nm-toc summary::after{content:\"\";width:9px;height:9px;border-right:2px solid #1B2A4A;border-bottom:2px solid #1B2A4A;transform:rotate(45deg);margin:-4px 4px 0 0;transition:transform .2s;flex:none;}\n.nm-toc[open] summary::after{transform:rotate(-135deg);margin-top:4px;}\n.nm-toc:not([open]) ol{display:none !important;}\n.nm-toc ol{margin:0 !important;padding:16px 22px 8px 44px !important;columns:2;column-gap:36px;border-top:1px solid #E3E7EF;}\n.nm-toc li{break-inside:avoid;margin:0 0 10px !important;font-size:15px;line-height:1.45;color:#5a6b8c;}\n.nm-toc li::marker{color:#C9A10C;font-weight:700;}\n.nm-toc a{color:#1B2A4A;text-decoration:none;}\n.nm-toc a:hover{text-decoration:underline;text-underline-offset:3px;}\n.entry-content h2[id]{scroll-margin-top:110px;}\n@media(max-width:820px){.nm-toc ol{columns:1;}}\n<\/style>\n<details class=\"nm-toc\">\n<summary>In this guide<small>10 sections<\/small><\/summary>\n<ol><li><a href=\"#does-portugal-tax-my-401-k-or-ira\">Does Portugal tax my 401(k) or IRA?<\/a><\/li><li><a href=\"#do-i-pay-tax-on-my-401-k-twice-to-portugal-and-to-the-us\">Do I pay tax on my 401(k) twice, to Portugal and to the US?<\/a><\/li><li><a href=\"#what-rate-will-i-pay-on-my-401-k-in-portugal\">What rate will I pay on my 401(k) in Portugal?<\/a><\/li><li><a href=\"#what-happened-to-nhr-s-10-rate-on-pensions\">What happened to NHR&#039;s 10% rate on pensions?<\/a><\/li><li><a href=\"#is-my-roth-ira-tax-free-in-portugal\">Is my Roth IRA tax-free in Portugal?<\/a><\/li><li><a href=\"#what-about-my-us-social-security\">What about my US Social Security?<\/a><\/li><li><a href=\"#which-us-tax-rules-still-apply-after-i-move-to-portugal\">Which US tax rules still apply after I move to Portugal?<\/a><\/li><li><a href=\"#can-my-old-state-still-tax-my-401-k-after-i-move\">Can my old state still tax my 401(k) after I move?<\/a><\/li><li><a href=\"#should-i-cash-out-my-401-k-before-i-move-to-portugal\">Should I cash out my 401(k) before I move to Portugal?<\/a><\/li><li><a href=\"#how-do-i-get-the-portuguese-side-checked\">How do I get the Portuguese side checked?<\/a><\/li><\/ol>\n<\/details>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"does-portugal-tax-my-401-k-or-ira\" class=\"wp-block-heading\">Does Portugal tax my 401(k) or IRA?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes. Once you&#8217;re a Portuguese tax resident, Portugal taxes your 401(k) and IRA withdrawals as pension income, in the year you take them.<\/strong><sup class=\"nm-fnref\"><a href=\"#source-3\">[3]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Three things follow from that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>You pay nothing while the money stays in the account.<\/strong> Portugal taxes a pension when it&#8217;s paid to you. The dividends and gains inside your 401(k) aren&#8217;t paid to you, so they aren&#8217;t taxed each year.<sup class=\"nm-fnref\"><a href=\"#source-3\">[3]<\/a><\/sup><\/li>\n\n\n\n<li><strong>Your withdrawals join your other income.<\/strong> Portugal adds them to everything else you earn that year and taxes the total on its normal scale.<sup class=\"nm-fnref\"><a href=\"#source-4\">[4]<\/a><\/sup><\/li>\n\n\n\n<li><strong>You declare them on your Portuguese return<\/strong> in the foreign-income annex, with any foreign tax you paid on them.<sup class=\"nm-fnref\"><a href=\"#source-19\">[19]<\/a><\/sup><\/li>\n<\/ul>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"do-i-pay-tax-on-my-401-k-twice-to-portugal-and-to-the-us\" class=\"wp-block-heading\">Do I pay tax on my 401(k) twice, to Portugal and to the US?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No. You pay roughly the higher of the two countries&#8217; tax, because the US\u2013Portugal tax treaty makes one country credit the other&#8217;s.<\/strong><sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s how it works for a 401(k). The treaty&#8217;s pensions rule gives Portugal, as the country you live in, the right to tax your withdrawals. <strong>The US keeps taxing you anyway<\/strong>, because it taxes its citizens wherever they live. To stop you paying twice, the treaty tells the IRS to treat your 401(k) income as Portuguese income, so you can <strong>claim a credit for the Portuguese tax<\/strong> against your US tax on it.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-2\">[2]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-14\">[14]<\/a><\/sup><\/p>\n\n\n\n<div class=\"nm-mf\" role=\"list\" aria-label=\"How a 401(k) withdrawal is taxed when you live in Portugal\">\n<style>\n.nm-mf{background:#1B2A4A;border-radius:20px;padding:30px 28px 26px;margin:30px 0 36px;font-family:inherit;display:grid;grid-template-columns:repeat(4,1fr);gap:14px;position:relative;}\n.nm-mf .nm-mf-k{grid-column:1\/-1;font-size:13px;font-weight:700;letter-spacing:.1em;text-transform:uppercase;color:#F5C518;margin:0 0 6px!important;}\n.nm-mf .nm-mf-s{background:rgba(255,255,255,.06);border:1px solid rgba(255,255,255,.14);border-radius:16px;padding:20px 16px 18px;position:relative;}\n.nm-mf .nm-mf-s:not(:nth-last-child(2)):after{content:\"\u2192\";position:absolute;right:-13px;top:50%;transform:translateY(-50%);width:24px;height:24px;border-radius:50%;background:#F5C518;color:#1B2A4A;font-weight:700;font-size:14px;line-height:24px;text-align:center;z-index:2;}\n.nm-mf .nm-mf-n{display:flex;width:36px;height:36px;border-radius:50%;background:#F5C518;color:#1B2A4A;font-weight:700;font-size:17px;align-items:center;justify-content:center;margin-bottom:14px;}\n.nm-mf .nm-mf-t{font-size:17.5px;line-height:1.35;font-weight:700;color:#fff;margin:0!important;}\n.nm-mf .nm-mf-c{grid-column:1\/-1;font-size:14px;color:rgba(255,255,255,.7);margin:8px 0 0!important;}\n@media(max-width:900px){.nm-mf{grid-template-columns:1fr!important;gap:16px;padding:24px 20px;}\n.nm-mf .nm-mf-s{display:flex;align-items:center;gap:14px;padding:16px;}\n.nm-mf .nm-mf-n{margin:0;flex:0 0 36px;}\n.nm-mf .nm-mf-s:not(:nth-last-child(2)):after{content:\"\u2193\";right:auto;left:50%;top:auto;bottom:-20px;transform:translateX(-50%);}}\n<\/style>\n<p class=\"nm-mf-k\">How your 401(k) withdrawal is taxed<\/p>\n<div class=\"nm-mf-s\" role=\"listitem\"><span class=\"nm-mf-n\">1<\/span><p class=\"nm-mf-t\">You take money out of your 401(k)<\/p><\/div>\n<div class=\"nm-mf-s\" role=\"listitem\"><span class=\"nm-mf-n\">2<\/span><p class=\"nm-mf-t\">Portugal taxes it on its normal scale<\/p><\/div>\n<div class=\"nm-mf-s\" role=\"listitem\"><span class=\"nm-mf-n\">3<\/span><p class=\"nm-mf-t\">You report it on your US return<\/p><\/div>\n<div class=\"nm-mf-s\" role=\"listitem\"><span class=\"nm-mf-n\">4<\/span><p class=\"nm-mf-t\">The IRS credits your Portuguese tax<\/p><\/div>\n<p class=\"nm-mf-c\">You pay the US only the difference, if its tax on that money is higher. For Social Security, the order is reversed.<\/p>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The order matters when you file.<\/strong> You work out the Portuguese tax first, then claim it on your US return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With an IRA, the same treaty stops you paying twice. <strong>Which country gives the credit depends on how your IRA was funded<\/strong>, for example whether it came from a 401(k) rollover or from your own contributions, so bring your account history to your adviser.<\/p>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"what-rate-will-i-pay-on-my-401-k-in-portugal\" class=\"wp-block-heading\">What rate will I pay on my 401(k) in Portugal?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Between 12.5% and 48% on each slice of your taxable income in 2026<\/strong>, after a pension deduction of <strong>\u20ac4,587 per person<\/strong>.<sup class=\"nm-fnref\"><a href=\"#source-4\">[4]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-6\">[6]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Portugal&#8217;s scale is progressive, so a modest withdrawal pays a much lower average rate than the top band suggests. Here&#8217;s what a single person with no other income would pay on three yearly amounts:<\/p>\n\n\n\n<div class=\"nm-bars\" role=\"figure\" aria-label=\"Portuguese tax on three yearly 401(k) withdrawals in 2026\">\n<style>\n.nm-bars{font-family:inherit;margin:34px 0 38px;}\n.nm-bars .nm-bc{border:1px solid #E3E7EF;border-radius:18px;padding:22px 24px;background:#fff;}\n.nm-bars .nm-k{font-size:12.5px;font-weight:700;letter-spacing:.1em;text-transform:uppercase;color:#5a6b8c;margin:0 0 16px!important;}\n.nm-bars .nm-br{display:grid;grid-template-columns:150px 1fr 84px;align-items:center;gap:10px;margin:0 0 12px;font-size:15px;color:#1B2A4A;}\n.nm-bars .nm-bt{height:22px;background:#F4F6FA;border-radius:6px;overflow:hidden;}\n.nm-bars .nm-bt i{display:block;height:100%;background:#1B2A4A;border-radius:6px;}\n.nm-bars .nm-bt i.g{background:#F5C518;}\n.nm-bars .nm-bv{font-weight:700;text-align:right;}\n.nm-bars .nm-bcap{font-size:13.5px;color:#5a6b8c;margin:12px 0 0!important;}\n@media(max-width:820px){.nm-bars .nm-br{grid-template-columns:110px 1fr 64px;font-size:14px;}}\n<\/style>\n<div class=\"nm-bc\">\n<p class=\"nm-k\">Portuguese tax on a yearly 401(k) withdrawal, 2026<\/p>\n<div class=\"nm-br\"><span>You take \u20ac24,000<\/span><span class=\"nm-bt\"><i class=\"g\" style=\"width:27.1%\"><\/i><\/span><span class=\"nm-bv\">\u20ac3,202<\/span><\/div>\n<div class=\"nm-br\"><span>You take \u20ac36,000<\/span><span class=\"nm-bt\"><i class=\"g\" style=\"width:57.1%\"><\/i><\/span><span class=\"nm-bv\">\u20ac6,753<\/span><\/div>\n<div class=\"nm-br\"><span>You take \u20ac50,000<\/span><span class=\"nm-bt\"><i class=\"g\" style=\"width:100%\"><\/i><\/span><span class=\"nm-bv\">\u20ac11,830<\/span><\/div>\n<p class=\"nm-bcap\">Illustration: a single person with no other income, after the \u20ac4,587 pension deduction, at the mainland 2026 rates in force, before deductions from the tax and any foreign tax credit. That&#8217;s about 13%, 19% and 24% of each withdrawal.<\/p>\n<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">A few things move those numbers:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The deduction is per pensioner.<\/strong> If you&#8217;re a couple and both of you draw a pension, each of you takes off the \u20ac4,587.<sup class=\"nm-fnref\"><a href=\"#source-6\">[6]<\/a><\/sup><\/li>\n\n\n\n<li><strong>Above \u20ac80,000 of taxable income you pay an extra 2.5%<\/strong>, rising to 5% above \u20ac250,000.<sup class=\"nm-fnref\"><a href=\"#source-4\">[4]<\/a><\/sup><\/li>\n\n\n\n<li><strong>Lower rates are coming for 2026 income.<\/strong> On 29 October 2026 the government approved cuts to the first six bands, backdated to January.<sup class=\"nm-fnref\"><a href=\"#source-5\">[5]<\/a><\/sup> Until the decree is published, this post uses the rates in force. <strong>At the new rates, the three examples above come to about \u20ac3,122, \u20ac6,617 and \u20ac11,658.<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Try your own figures<\/strong> in our <a href=\"\/portugal-401k-tax-calculator\/\">401(k) and IRA tax calculator<\/a>: enter your withdrawals and Social Security in dollars, for you alone or as a couple.<\/p>\n\n\n\n<h3 id=\"so-what-would-i-actually-pay-on-36-000-a-year\" class=\"wp-block-heading\">&#8220;So what would I actually pay on \u20ac36,000 a year?&#8221;<\/h3>\n\n\n\n<div class=\"nm-cost\">\n<div class=\"nm-ch\">Example: you take <span>\u20ac36,000<\/span> a year from your 401(k)<\/div>\n<div class=\"nm-cg\">\n<div class=\"nm-ci\"><div class=\"v\">\u20ac36,000<\/div><div class=\"l\">your withdrawal, single, no other income<\/div><\/div>\n<div class=\"nm-ci\"><div class=\"v\">\u2212 \u20ac4,587<\/div><div class=\"l\">pension deduction<\/div><\/div>\n<div class=\"nm-ci\"><div class=\"v\">\u20ac31,413<\/div><div class=\"l\">taxed on the 2026 scale<\/div><\/div>\n<div class=\"nm-ci\"><div class=\"v\">\u2248 \u20ac6,753<\/div><div class=\"l\">Portuguese tax at mainland rates, before deductions from the tax<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>That&#8217;s about 19% of your withdrawal<\/strong> at mainland rates, before the deductions that come off the tax itself, such as your general family and health expenses, and before any foreign tax credit. Then the IRS looks at the same money. <strong>If the Portuguese tax is higher than the US tax on it, the credit can cover the US tax on that income in full.<\/strong> Your US adviser will run the US side with your own figures.<\/p>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"what-happened-to-nhr-s-10-rate-on-pensions\" class=\"wp-block-heading\">What happened to NHR&#8217;s 10% rate on pensions?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Portugal closed NHR to newcomers from 2024, so if you move in 2026 or 2027 you can&#8217;t get it.<\/strong><sup class=\"nm-fnref\"><a href=\"#source-8\">[8]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">NHR taxed foreign pensions at 10% for people who registered from April 2020, and not at all for those who registered before.<sup class=\"nm-fnref\"><a href=\"#source-8\">[8]<\/a><\/sup> <strong>Only people who were already in it, or who became resident by the end of 2024 under the transition rules, keep it<\/strong> for the rest of their ten years.<sup class=\"nm-fnref\"><a href=\"#source-8\">[8]<\/a><\/sup><\/p>\n\n\n\n<div class=\"nm-acc\" role=\"figure\" aria-label=\"NHR, IFICI and the normal scale compared for pension income\">\n<style>\n.nm-acc{margin:28px 0;font-family:inherit;}\n.nm-acc .nm-acc-grid{display:grid;grid-template-columns:repeat(3,1fr);gap:16px;}\n.nm-acc .nm-acc-card{background:#F4F6FA;border:1px solid #E3E7EF;border-radius:16px;padding:20px 20px 18px;}\n.nm-acc .nm-acc-card.nm-acc-both{background:#1B2A4A;border-color:#1B2A4A;color:#fff;}\n.nm-acc .nm-acc-tag{display:inline-block;font-size:12px;font-weight:700;letter-spacing:.06em;text-transform:uppercase;padding:5px 11px;border-radius:999px;background:#E3E7EF;color:#1B2A4A;margin:0 0 12px;}\n.nm-acc .nm-acc-both .nm-acc-tag{background:#F5C518;color:#1B2A4A;}\n.nm-acc h4{font-size:19px;line-height:1.3;margin:0 0 6px;color:#1B2A4A;font-family:inherit;}\n.nm-acc .nm-acc-both h4{color:#fff;}\n.nm-acc .nm-acc-holds{font-size:15px;line-height:1.5;margin:0 0 12px;color:#5a6b8c;}\n.nm-acc .nm-acc-both .nm-acc-holds{color:rgba(255,255,255,.8);}\n.nm-acc ul{list-style:none;margin:0;padding:0;}\n.nm-acc li{font-size:15px;line-height:1.5;margin:0 0 7px;padding-left:26px;position:relative;color:#1B2A4A;}\n.nm-acc .nm-acc-both li{color:#fff;}\n.nm-acc li:before{position:absolute;left:0;top:0;font-weight:700;}\n.nm-acc li.y:before{content:\"\u2713\";color:#00B67A;}\n.nm-acc li.n:before{content:\"\u2715\";color:#C0392B;}\n.nm-acc .nm-acc-both li.y:before{color:#F5C518;}\n.nm-acc .nm-acc-flow{display:flex;flex-wrap:wrap;align-items:center;gap:8px;margin:18px 0 0;padding:16px 18px;border:1px dashed #C9D0DC;border-radius:14px;font-size:14.5px;line-height:1.4;color:#1B2A4A;}\n.nm-acc .nm-acc-step{background:#fff;border:1px solid #E3E7EF;border-radius:10px;padding:7px 11px;}\n.nm-acc .nm-acc-arrow{color:#F5C518;font-weight:700;}\n.nm-acc .nm-acc-cap{font-size:13.5px;color:#5a6b8c;margin:10px 0 0;}\n@media(max-width:820px){.nm-acc .nm-acc-grid{grid-template-columns:1fr!important;}}\n<\/style>\n<div class=\"nm-acc-grid\">\n<div class=\"nm-acc-card\">\n<span class=\"nm-acc-tag\">NHR<\/span>\n<h4>Closed to you<\/h4>\n<p class=\"nm-acc-holds\">The old scheme for new residents.<\/p>\n<ul>\n<li class=\"y\">Taxed foreign pensions at 10% from April 2020<\/li>\n<li class=\"n\">You can&#8217;t join it if you move in 2026 or later<\/li>\n<li class=\"n\">Only earlier movers keep it, for their ten years<\/li>\n<\/ul>\n<\/div>\n<div class=\"nm-acc-card\">\n<span class=\"nm-acc-tag\">IFICI<\/span>\n<h4>No help with your pension<\/h4>\n<p class=\"nm-acc-holds\">The scheme that replaced NHR.<\/p>\n<ul>\n<li class=\"y\">A 20% rate on qualifying work income<\/li>\n<li class=\"n\">Leaves pension income out<\/li>\n<li class=\"n\">Your 401(k) stays on the normal scale<\/li>\n<\/ul>\n<\/div>\n<div class=\"nm-acc-card nm-acc-both\">\n<span class=\"nm-acc-tag\">Normal scale<\/span>\n<h4>What you&#8217;ll pay on<\/h4>\n<p class=\"nm-acc-holds\">Every resident&#8217;s progressive rates.<\/p>\n<ul>\n<li class=\"y\">12.5% to 48% in bands, in 2026<\/li>\n<li class=\"y\">\u20ac4,587 pension deduction per person<\/li>\n<li class=\"y\">A credit on your US return for this tax<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>IFICI, the scheme that replaced it, leaves pensions out.<\/strong> Its 20% rate covers qualifying work income, and its exemptions for foreign income don&#8217;t include pensions.<sup class=\"nm-fnref\"><a href=\"#source-7\">[7]<\/a><\/sup> So even if you qualify for IFICI through work, <strong>your 401(k) withdrawals stay on the normal scale.<\/strong><\/p>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"is-my-roth-ira-tax-free-in-portugal\" class=\"wp-block-heading\">Is my Roth IRA tax-free in Portugal?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No. Portugal doesn&#8217;t recognise a Roth&#8217;s tax-free status, so expect Portuguese tax on at least the growth when you withdraw, and possibly on the whole amount.<\/strong><sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-3\">[3]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The US\u2013Portugal treaty has no Roth clause. Some other US treaties have one; this one doesn&#8217;t.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup> So the IRS may treat your qualified Roth withdrawals as tax-free, while <strong>Portugal taxes them as pension income<\/strong> once you live here.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Keep the paperwork that shows what you paid in.<\/strong> Your Forms 5498 and 8606 and your 1099-R statements record your contributions and withdrawals. They&#8217;re how your Portuguese adviser shows which part of each withdrawal is money you put in.<\/p>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"what-about-my-us-social-security\" class=\"wp-block-heading\">What about my US Social Security?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Both countries can tax it, and here the order is reversed: the US taxes it first and Portugal credits the US tax.<\/strong><sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-2\">[2]<\/a><\/sup><\/p>\n\n\n\n<div class=\"nm-dep\">\n<div class=\"nm-dc y\"><p class=\"w\">Portugal taxes first<\/p><h4>Your 401(k) and IRA<\/h4><p>Portugal taxes your withdrawals as the country you live in. The IRS taxes you as a citizen and credits the Portuguese tax.<\/p><\/div>\n<div class=\"nm-dc\"><p class=\"w\">The US taxes first<\/p><h4>Your Social Security<\/h4><p>The IRS taxes up to 85% of your benefit. Portugal taxes it as a pension and credits the US tax.<\/p><\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Under US rules the IRS taxes <strong>up to 85% of your benefit<\/strong>. Portugal taxes it as a pension too, on the same scale as your 401(k), and then <strong>gives you a credit for the US tax<\/strong> you paid on it, up to the Portuguese tax on that income.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-2\">[2]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So if you&#8217;ve read that Portugal &#8220;doesn&#8217;t tax Social Security&#8221;, or that only the US does, <strong>that isn&#8217;t what the treaty says.<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"573\" src=\"\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-1024x573.jpg\" alt=\"A wooden desk with two stacks of blank forms, a fountain pen and a small olive tree beside an open window over pastel Lisbon buildings\" class=\"wp-image-14769\" srcset=\"https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-1024x573.jpg 1024w, https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-300x168.jpg 300w, https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-768x430.jpg 768w, https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-1536x859.jpg 1536w, https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid-18x10.jpg 18w, https:\/\/novomove.com\/wp-content\/uploads\/2026\/11\/moving-portugal-401k-mid.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Illustrative image.<\/figcaption><\/figure>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"which-us-tax-rules-still-apply-after-i-move-to-portugal\" class=\"wp-block-heading\">Which US tax rules still apply after I move to Portugal?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>All the rules that come with your retirement accounts still apply<\/strong>, wherever you live, because the US taxes its citizens on their worldwide income.<sup class=\"nm-fnref\"><a href=\"#source-9\">[9]<\/a><\/sup><\/p>\n\n\n\n<div class=\"nm-qs\">\n<p class=\"nm-k\">US rules that follow you to Portugal<\/p>\n<ol>\n<li><span>\u2713<\/span>You file a US return every year, on your worldwide income.<\/li>\n<li><span>\u2713<\/span>Before 59\u00bd, the 10% early-withdrawal tax still applies, unless an exception fits you.<\/li>\n<li><span>\u2713<\/span>Required minimum distributions start at 73, or at 75 if you reach 74 after 2032.<\/li>\n<li><span>\u2713<\/span>Your Portuguese bank account goes on the FBAR once your foreign accounts pass $10,000.<\/li>\n<li><span>\u2713<\/span>Above higher thresholds, you also file Form 8938.<\/li>\n<li><span>\u2713<\/span>Portuguese funds you hold in your own name usually mean PFIC paperwork.<\/li>\n<\/ol>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Two of these catch people out:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The foreign earned income exclusion won&#8217;t help you.<\/strong> It covers wages and self-employment income. Pensions, annuities and Social Security are left out of it.<sup class=\"nm-fnref\"><a href=\"#source-13\">[13]<\/a><\/sup><\/li>\n\n\n\n<li><strong>US payers withhold tax on payments sent abroad.<\/strong> If your plan pays to a Portuguese address, it must generally withhold US income tax unless you give it a US address or another valid reason not to.<sup class=\"nm-fnref\"><a href=\"#source-9\">[9]<\/a><\/sup><\/li>\n<\/ul>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"can-my-old-state-still-tax-my-401-k-after-i-move\" class=\"wp-block-heading\">Can my old state still tax my 401(k) after I move?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>It can, if it still treats you as a resident.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Federal law stops a state taxing the retirement income of someone who isn&#8217;t its resident or domiciliary. But <strong>each state decides who counts as its resident<\/strong>.<sup class=\"nm-fnref\"><a href=\"#source-17\">[17]<\/a><\/sup> Virginia, for example, treats anyone domiciled there at any point in the year as a resident.<sup class=\"nm-fnref\"><a href=\"#source-18\">[18]<\/a><\/sup><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So the move on paper isn&#8217;t enough. <strong>Show your state you&#8217;ve left<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Close or change<\/strong> your driver&#8217;s licence, voter registration and home address.<\/li>\n\n\n\n<li><strong>File a final part-year return<\/strong> if your state expects one.<\/li>\n\n\n\n<li><strong>Ask a US adviser<\/strong> how your own state judges domicile before your first withdrawal from Portugal.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"should-i-cash-out-my-401-k-before-i-move-to-portugal\" class=\"wp-block-heading\">Should I cash out my 401(k) before I move to Portugal?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Get advice on both sides before you decide, ideally before you become a Portuguese tax resident.<\/strong> A large one-off withdrawal is the single biggest tax decision in this whole move.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s why the timing matters:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Money you withdraw before you become a Portuguese tax resident<\/strong> is taxed by the US and your state, with no Portuguese tax on it. Portugal usually treats you as resident from your first day living here, so in the year you move, only withdrawals before that day stay outside its reach.<sup class=\"nm-fnref\"><a href=\"#source-21\">[21]<\/a><\/sup><\/li>\n\n\n\n<li><strong>A big withdrawal after you move<\/strong> lands in a single Portuguese tax year. On a progressive scale, one large year can push part of it into <strong>the 48% band and the extra 2.5% or 5%<\/strong>.<sup class=\"nm-fnref\"><a href=\"#source-4\">[4]<\/a><\/sup><\/li>\n\n\n\n<li><strong>Before 59\u00bd, the US adds its 10% early-withdrawal tax<\/strong> wherever you live, unless an exception applies. For a 401(k), one exception is leaving your job in or after the year you turn 55.<sup class=\"nm-fnref\"><a href=\"#source-10\">[10]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-11\">[11]<\/a><\/sup><\/li>\n<\/ul>\n\n\n\n<div class=\"nm-flow\" role=\"list\" aria-label=\"What to sort out before and after you move to Portugal with a 401(k) or IRA\">\n<div class=\"nm-fs\" role=\"listitem\"><div class=\"nm-fn\">1<\/div><div><p class=\"nm-ft\">Before you move<\/p><p class=\"nm-fd\">Decide on any large withdrawal with advice on both sides. Ask your plan or broker whether it keeps your account open with a Portuguese address. Tell your state you&#8217;ve left.<\/p><span class=\"nm-chip g\">The cheapest moment to plan<\/span><\/div><\/div>\n<div class=\"nm-fs\" role=\"listitem\"><div class=\"nm-fn\">2<\/div><div><p class=\"nm-ft\">Your first year as a Portuguese resident<\/p><p class=\"nm-fd\">Your withdrawals go on Portugal&#8217;s scale. You file your first Portuguese return the following spring, then claim the Portuguese tax on your US return.<\/p><span class=\"nm-chip\">Portuguese return first, then the US<\/span><\/div><\/div>\n<div class=\"nm-fs\" role=\"listitem\"><div class=\"nm-fn\">3<\/div><div><p class=\"nm-ft\">Every year after<\/p><p class=\"nm-fd\">Two returns, the FBAR, and your required minimum distributions once you reach their age. Keep every 1099-R and Portuguese tax statement together.<\/p><span class=\"nm-chip\">Two returns a year<\/span><\/div><\/div>\n<\/div>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"how-do-i-get-the-portuguese-side-checked\" class=\"wp-block-heading\">How do I get the Portuguese side checked?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Book a 45-minute consultation with a certified Portuguese accountant<\/strong> before your first withdrawal as a resident.<\/p>\n\n\n\n<div class=\"nm-cta\">\n<style>\n.nm-cta{background:#1B2A4A;border-radius:20px;overflow:hidden;color:#fff;box-shadow:0 24px 60px rgba(10,15,30,.18);margin:40px 0;font-family:inherit;}\n.nm-cta img{width:100%;aspect-ratio:16\/9;object-fit:cover;display:block;margin:0;}\n.nm-cta .nm-cta-body{padding:38px;}\n.nm-cta .nm-cta-pill{display:inline-block;background:#F5C518;color:#1B2A4A;border-radius:999px;padding:6px 14px;font-size:13px;font-weight:700;}\n.nm-cta p{font-size:17px;line-height:1.65;color:rgba(255,255,255,.86);margin:18px 0 22px;}\n.nm-cta p a{color:#F5C518;text-decoration:underline;text-underline-offset:3px;}\n.nm-cta .nm-cta-btns{display:flex;flex-wrap:wrap;gap:12px;}\n.nm-cta .nm-btn-p{display:inline-flex;align-items:center;background:#F5C518;color:#1B2A4A !important;padding:14px 24px;border-radius:12px;font-weight:700;font-size:16px;text-decoration:none;}\n.nm-cta .nm-btn-p:hover{background:#E3B30C;}\n.nm-cta .nm-btn-s{display:inline-flex;align-items:center;color:#fff !important;border:1px solid rgba(255,255,255,.4);padding:14px 24px;border-radius:12px;font-weight:700;font-size:16px;text-decoration:none;}\n.nm-cta .nm-btn-s:hover{background:#fff;color:#1B2A4A !important;}\n@media (max-width:640px){.nm-cta .nm-cta-body{padding:26px 22px;}}\n<\/style>\n<img decoding=\"async\" src=\"\/wp-content\/uploads\/2026\/07\/cta-miradouro.png\" alt=\"A miradouro view over Lisbon rooftops at golden hour\">\n<div class=\"nm-cta-body\">\n<span class=\"nm-cta-pill\">Your Portuguese tax, checked<\/span>\n<p>Our partner accountant, certified in Portugal, works through your pensions, your 401(k) or IRA and the treaty from the Portuguese side, and you get a written summary afterwards. <strong>For the US side, you&#8217;ll need a US-qualified adviser.<\/strong> If your visa is still ahead of you, our team handles that too.<\/p>\n<div class=\"nm-cta-btns\">\n<a class=\"nm-btn-p\" href=\"\/portugal-tax-consultation\/\">Book a tax consultation<\/a>\n<a class=\"nm-btn-s\" href=\"\/portugal-d7-visa-assistance\/\">See D7 visa support<\/a>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"frequently-asked-questions\" class=\"wp-block-heading\">Frequently asked questions<\/h2>\n\n\n\n<h3 id=\"does-portugal-tax-my-401-k-if-i-don-t-withdraw-anything\" class=\"wp-block-heading\">Does Portugal tax my 401(k) if I don&#8217;t withdraw anything?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> Portugal taxes a pension when it&#8217;s paid to you. Growth that stays inside your 401(k) or IRA isn&#8217;t paid to you, so it isn&#8217;t taxed each year.<sup class=\"nm-fnref\"><a href=\"#source-3\">[3]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"will-the-us-still-tax-me-after-i-move-to-portugal\" class=\"wp-block-heading\">Will the US still tax me after I move to Portugal?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes.<\/strong> The US taxes its citizens on their worldwide income wherever they live, and the treaty keeps that right. You claim a credit for the Portuguese tax on your 401(k) withdrawals.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-9\">[9]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"do-i-still-pay-the-10-early-withdrawal-tax-if-i-live-in-port\" class=\"wp-block-heading\">Do I still pay the 10% early-withdrawal tax if I live in Portugal?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes, before 59\u00bd<\/strong>, unless an exception applies. Moving abroad doesn&#8217;t remove it. For a 401(k), leaving your job in or after the year you turn 55 is one exception.<sup class=\"nm-fnref\"><a href=\"#source-10\">[10]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-11\">[11]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"do-required-minimum-distributions-still-apply-in-portugal\" class=\"wp-block-heading\">Do required minimum distributions still apply in Portugal?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes.<\/strong> You must start them at 73, or at 75 if you reach 74 after 2032. Portugal then taxes each distribution as pension income.<sup class=\"nm-fnref\"><a href=\"#source-10\">[10]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-12\">[12]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"can-i-use-the-foreign-earned-income-exclusion-on-my-pension\" class=\"wp-block-heading\">Can I use the foreign earned income exclusion on my pension?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> The exclusion covers earned income. Pensions, annuities and Social Security are outside it.<sup class=\"nm-fnref\"><a href=\"#source-13\">[13]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"is-us-social-security-taxed-in-portugal\" class=\"wp-block-heading\">Is US Social Security taxed in Portugal?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes.<\/strong> Both countries can tax it. The US taxes it first, and Portugal gives you a credit for the US tax.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-2\">[2]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"does-ifici-lower-the-tax-on-my-pension\" class=\"wp-block-heading\">Does IFICI lower the tax on my pension?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> IFICI&#8217;s 20% rate is for qualifying work income, and its foreign-income exemptions leave pensions out. Your pension stays on the normal scale.<sup class=\"nm-fnref\"><a href=\"#source-7\">[7]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"can-i-still-get-nhr-s-10-rate-on-my-pension\" class=\"wp-block-heading\">Can I still get NHR&#8217;s 10% rate on my pension?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No, if you become resident in 2026 or later.<\/strong> Only people already registered, or who became resident by the end of 2024 under the transition rules, keep it.<sup class=\"nm-fnref\"><a href=\"#source-8\">[8]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"is-my-roth-ira-tax-free-in-portugal\" class=\"wp-block-heading\">Is my Roth IRA tax-free in Portugal?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> Portugal doesn&#8217;t recognise the Roth&#8217;s tax-free status, so expect tax on at least the growth, and possibly the whole withdrawal. Keep your Forms 5498, 8606 and 1099-R.<sup class=\"nm-fnref\"><a href=\"#source-1\">[1]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-3\">[3]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"do-i-have-to-report-my-portuguese-bank-account-to-the-irs\" class=\"wp-block-heading\">Do I have to report my Portuguese bank account to the IRS?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes, if your foreign accounts add up to more than $10,000<\/strong> at any point in the year. That&#8217;s the FBAR. Above higher thresholds you also file Form 8938.<sup class=\"nm-fnref\"><a href=\"#source-15\">[15]<\/a><\/sup><sup class=\"nm-fnref\"><a href=\"#source-16\">[16]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"do-portuguese-investment-funds-create-extra-us-paperwork\" class=\"wp-block-heading\">Do Portuguese investment funds create extra US paperwork?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes, if you hold them in your own name.<\/strong> Most foreign funds count as PFICs for US tax. <strong>Inside your IRA or 401(k), you don&#8217;t file the PFIC form<\/strong> for them.<sup class=\"nm-fnref\"><a href=\"#source-20\">[20]<\/a><\/sup><\/p>\n\n\n\n<h3 id=\"can-novomove-s-tax-consultation-cover-the-us-side-too\" class=\"wp-block-heading\">Can Novomove&#8217;s tax consultation cover the US side too?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> Our partner accountant advises on Portuguese tax, including how Portugal applies the treaty to your US income. <strong>For your US return, you&#8217;ll need a US-qualified adviser.<\/strong><\/p>\n\n\n\n<div style=\"height:32px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 id=\"sources-and-how-we-checked\" class=\"wp-block-heading\">Sources and how we checked<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">We read the treaty, the Portuguese tax code and the IRS texts below directly, and our partner accountant checked the Portuguese side and the worked example. <strong>We give no tax advice<\/strong>: this post explains how the rules work, and your own case needs an adviser on each side. Rates are those in force for 2026 income.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li id=\"source-1\"><strong>The treaty, its pensions and Social Security rules, the saving clause and the relief from double tax:<\/strong> <a href=\"https:\/\/www.irs.gov\/pub\/irs-trty\/portugal.pdf\" target=\"_blank\" rel=\"noopener\">Convention between the United States and Portugal on income taxes, with Protocol, signed 6 September 1994 (IRS)<\/a>, articles 20, 25 and Protocol paragraph 1.<\/li>\n\n\n\n<li id=\"source-2\"><strong>How the credits work in each direction:<\/strong> <a href=\"https:\/\/home.treasury.gov\/system\/files\/131\/Treaty-Portugal-TE-9-6-1994.pdf\" target=\"_blank\" rel=\"noopener\">US Treasury, Technical Explanation of the US\u2013Portugal convention, 1994<\/a>.<\/li>\n\n\n\n<li id=\"source-3\"><strong>Pensions as category H income, taxed when paid:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs11.aspx\" target=\"_blank\" rel=\"noopener\">Portuguese income tax code (CIRS), article 11, Portal das Finan\u00e7as<\/a>.<\/li>\n\n\n\n<li id=\"source-4\"><strong>The 2026 scale and the solidarity surcharge:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs68.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 68<\/a> (wording from the 2026 State Budget, Lei 73-A\/2025) and <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs68a.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 68-A<\/a>.<\/li>\n\n\n\n<li id=\"source-5\"><strong>The approved cuts to the first six bands:<\/strong> <a href=\"https:\/\/files.diariodarepublica.pt\/1s\/2026\/10\/20501\/0000400004.pdf\" target=\"_blank\" rel=\"noopener\">Lei 64-B\/2026, 22 October 2026, Di\u00e1rio da Rep\u00fablica<\/a>, and the government&#8217;s approval on 29 October 2026, backdated to January (<a href=\"https:\/\/www.rtp.pt\/noticias\/economia\/governo-aprova-descida-das-taxas-de-irs-de-2026-apos-autorizacao-parlamentar_n1775398\" target=\"_blank\" rel=\"noopener\">RTP, 29 October 2026<\/a>).<\/li>\n\n\n\n<li id=\"source-6\"><strong>The pension deduction (8.54 times the IAS):<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs53.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 53<\/a>, <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs25.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 25<\/a> and the 2026 IAS of \u20ac537.13 in <a href=\"https:\/\/diariodarepublica.pt\/dr\/detalhe\/portaria\/480-a-2025-993056222\" target=\"_blank\" rel=\"noopener\">Portaria 480-A\/2025\/1<\/a>.<\/li>\n\n\n\n<li id=\"source-7\"><strong>What IFICI covers:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/bf_rep\/Pages\/ebf58a.aspx\" target=\"_blank\" rel=\"noopener\">Tax Benefits Statute, article 58-A<\/a> and <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs81.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 81<\/a>.<\/li>\n\n\n\n<li id=\"source-8\"><strong>NHR&#8217;s 10% pension rate, its end and the transition rules:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/ra\/Pages\/irs72ra_202312.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 72 as worded until December 2023<\/a>, <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/artigo329_oe2020.aspx\" target=\"_blank\" rel=\"noopener\">Lei 2\/2020, article 329<\/a>, and Lei 82\/2023, article 236, reproduced in the note to <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs81.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 81<\/a>.<\/li>\n\n\n\n<li id=\"source-9\"><strong>Worldwide taxation of US citizens abroad and withholding on pensions sent abroad:<\/strong> <a href=\"https:\/\/www.irs.gov\/publications\/p54\" target=\"_blank\" rel=\"noopener\">IRS Publication 54<\/a>.<\/li>\n\n\n\n<li id=\"source-10\"><strong>The 10% additional tax before 59\u00bd and required minimum distributions:<\/strong> <a href=\"https:\/\/www.irs.gov\/publications\/p590b\" target=\"_blank\" rel=\"noopener\">IRS Publication 590-B<\/a>.<\/li>\n\n\n\n<li id=\"source-11\"><strong>The age-55 separation exception for 401(k) plans:<\/strong> <a href=\"https:\/\/www.irs.gov\/publications\/p575\" target=\"_blank\" rel=\"noopener\">IRS Publication 575<\/a>.<\/li>\n\n\n\n<li id=\"source-12\"><strong>RMD ages of 73 and 75:<\/strong> <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/401\" target=\"_blank\" rel=\"noopener\">26 U.S.C. \u00a7401(a)(9)<\/a>.<\/li>\n\n\n\n<li id=\"source-13\"><strong>Pensions excluded from the foreign earned income exclusion:<\/strong> <a href=\"https:\/\/www.irs.gov\/instructions\/i2555\" target=\"_blank\" rel=\"noopener\">Instructions for Form 2555<\/a>.<\/li>\n\n\n\n<li id=\"source-14\"><strong>Treaty re-sourcing for US citizens living in the treaty country:<\/strong> <a href=\"https:\/\/www.irs.gov\/instructions\/i1116\" target=\"_blank\" rel=\"noopener\">Instructions for Form 1116<\/a>.<\/li>\n\n\n\n<li id=\"source-15\"><strong>The $10,000 FBAR threshold:<\/strong> <a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/report-of-foreign-bank-and-financial-accounts-fbar\" target=\"_blank\" rel=\"noopener\">IRS, Report of Foreign Bank and Financial Accounts<\/a>.<\/li>\n\n\n\n<li id=\"source-16\"><strong>Form 8938 thresholds for people living abroad:<\/strong> <a href=\"https:\/\/www.irs.gov\/instructions\/i8938\" target=\"_blank\" rel=\"noopener\">Instructions for Form 8938<\/a>.<\/li>\n\n\n\n<li id=\"source-17\"><strong>States can&#8217;t tax non-residents&#8217; retirement income, as each state defines residence:<\/strong> <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/4\/114\" target=\"_blank\" rel=\"noopener\">4 U.S.C. \u00a7114<\/a>.<\/li>\n\n\n\n<li id=\"source-18\"><strong>Virginia&#8217;s residence rule:<\/strong> <a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title58.1\/chapter3\/section58.1-302\/\" target=\"_blank\" rel=\"noopener\">Code of Virginia \u00a758.1-302<\/a>.<\/li>\n\n\n\n<li id=\"source-19\"><strong>Declaring foreign pensions and the foreign tax paid:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/apoio_contribuinte\/modelos_formularios\/irs\/Documents\/Mod_3_anexo_J.pdf\" target=\"_blank\" rel=\"noopener\">Portal das Finan\u00e7as, instructions for Anexo J<\/a>.<\/li>\n\n\n\n<li id=\"source-20\"><strong>PFICs, and no Form 8621 for funds held in an IRA or 401(k):<\/strong> <a href=\"https:\/\/www.irs.gov\/instructions\/i8621\" target=\"_blank\" rel=\"noopener\">Instructions for Form 8621<\/a>.<\/li>\n\n\n\n<li id=\"source-21\"><strong>When your Portuguese tax residence starts:<\/strong> <a href=\"https:\/\/info.portaldasfinancas.gov.pt\/pt\/informacao_fiscal\/codigos_tributarios\/cirs_rep\/Pages\/irs16.aspx\" target=\"_blank\" rel=\"noopener\">CIRS article 16<\/a>.<\/li>\n<\/ol>\n\n\n\n<style>\n.entry-content sup.nm-fnref{font-size:.72em;line-height:0;vertical-align:super;margin-left:2px;}\n.entry-content sup.nm-fnref a{color:#1a5fb4;text-decoration:none;font-weight:600;}\n.entry-content sup.nm-fnref a:hover{text-decoration:underline;}\n.entry-content li[id^=\"source-\"]{scroll-margin-top:110px;}\n.entry-content li[id^=\"source-\"]:target{background:#FFFBF0;}\n<\/style>\n\n\n\n<script type=\"application\/ld+json\">\n{\"@context\": 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