US Taxes While Living in Norway: What Americans Still Owe and File
Written by Hans Goldstein, licensed insurance agent · CA 4273294Short answer: US citizens are taxed on worldwide income wherever they live, so you keep filing a US return. Under the 1971 US-Norway treaty, US Social Security is taxable only by the US (Article 19), and an annuity is taxable only by Norway as your residence country (Article 18(2)); the US still taxes citizens through the saving clause. The treaty has no re-sourcing rule, so it is Norway, not the US, that credits the other country’s tax on the annuity (Article 23(2)(b)). Norwegian bank accounts go on the FBAR above $10,000. A US-issued SPIA does not go on the FBAR or Form 8938.
Free guide: Moving abroad on a fixed income
Income rules and taxes by country: Norway, Switzerland, Sweden, Italy, Spain, Malta and more, plus how a lifetime annuity fits.
Moving to Norway does not end your US tax life. It adds a second one. Here is the map I put together while helping my parents plan their move, using the treaty text and IRS pages.
The treaty in five lines
| Income or asset | Treaty article | Who taxes it (Norway resident) |
|---|---|---|
| US Social Security | Art. 19 | Only the US, and this survives the saving clause |
| Norwegian NAV pension paid to a US resident | Art. 19 | Only Norway |
| Annuity (for example a US SPIA) | Art. 18(2) | Only Norway as residence state; the US still taxes citizens via the saving clause, and Norway credits the US tax (Art. 23(2)(b)) |
| Private employer pension | Art. 18(1) | Residence state (Norway); US taxes citizens anyway |
| Capital (wealth) | Art. 21 | Residence state for most assets (Art. 21(4)), so Norway can wealth-tax your US accounts; US real property may be taxed by the US (Art. 21(1)) |
The treaty defines an annuity as “a stated sum paid periodically at stated times during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration”. A SPIA fits that definition.
How the annuity is taxed
US side. As a US citizen you stay taxable on worldwide income wherever you live. A US single premium immediate annuity bought with after-tax savings is taxed under IRC 72: an exclusion ratio makes part of each payment a non-taxable return of your premium until the premium is recovered. If you bought it with IRA money, every payment is taxable. The foreign earned income exclusion ($132,900 for 2026) does not cover annuities (IRC 911(b)(1)(B)(i)). Foreign tax on the payments can be credited on Form 1116 where a credit is available. Since January 1, 2026, a US citizen with a foreign residence address cannot opt out of federal withholding, even if payments go to a US account (IRC 3405(e)(13), Treas. Reg. 31.3405(e)-1). Withholding is a prepayment, not extra tax. An annuity from a US insurer is not reported on FBAR or Form 8938, and it is not a PFIC.
Treaty: the saving clause and who credits whom. Article 18(2) says annuities paid to a resident of Norway are taxable only in Norway. Article 22(3) lets the US tax its citizens as if the treaty did not exist, with exceptions that include Article 19 (social security) and Article 23 (relief from double taxation) but not Article 18. So a US citizen in Norway still reports the annuity on Form 1040. Here is the part most guides get wrong: the 1971 treaty has no rule that re-sources a US annuity to Norway. A payment from a US insurer stays US-source income, so the US foreign tax credit limit on it is generally zero and the US does not credit the Norwegian tax. Instead, Article 23(2)(b) has Norway credit the US tax on income both countries may tax. Confirm how Norway applies that credit to your annuity with a Norwegian tax adviser.
Norway side. A life annuity from an insurer never licensed in Norway is taxed on the gross payment as general income at 22% (Skatte-ABC F-24-5.1, skatteloven § 5-1), and it is not taxable wealth (F-24-2.1).
Net result. Because Norway taxes the gross payment at 22% while the US taxes only the part above your exclusion ratio, Norway’s tax is usually the binding one, with the smaller US tax credited against it in Norway. You end up paying roughly the higher of the two, not both, if the credit works as the treaty reads.
Why I write about this. My mom is Norwegian, my dad is American, and they’re planning the move from the US to Norway. My mom is the sponsor (the host, or “reference person” in UDI’s words), so Norway’s income test falls on her income, not my dad’s. UDI told us in writing that money in an account does not count as income, and only lifelong income does. Their savings were not the problem; the paperwork wanted a monthly number in the host’s name. The rules in Norway are different, but the problem is the same one many retirees hit: the income test, not the net worth. I’m writing this to help others in the same boat as my parents. Read how we worked through the Norway income requirement.
In the same boat? Let’s run your numbers
See roughly what a lifetime annuity would cost to close your income gap, then get my personal read by email. I can help while you still live in the US.
Estimates use the September 9, 2026 ImmediateAnnuities.com payout survey (life only) and a 15% cushion. Illustrative, not a quote.
FBAR and Form 8938
| FBAR (FinCEN 114) | Form 8938 (living abroad) | |
|---|---|---|
| Threshold | All foreign accounts together above $10,000 at any time | Single: above $200,000 at year end or $300,000 at any time. Joint: $400,000 / $600,000 |
| Norwegian bank account | Reportable | Reportable above threshold |
| US-issued SPIA | Not reportable (not a foreign account) | Not reportable (US issuer) |
| Norwegian insurance or annuity with cash value | Reportable | Reportable |
Keep the Norwegian spending account modest and let the income source stay in the US. The IRS publishes the comparison table linked below.
The PFIC trap
Norwegian mutual funds (verdipapirfond), fund holdings inside an aksjesparekonto (ASK) and Norwegian ETFs are generally treated as passive foreign investment companies for US persons. That means Form 8621 and a punitive tax regime unless special elections apply. This is a standard rule, but get a cross-border tax preparer to confirm before you invest locally. Individual Norwegian shares are not PFICs. A US SPIA is a domestic contract, not a PFIC.
Worked example: one SPIA, two tax returns
An American aged 65 bought a $300,000 non-qualified life-only SPIA in the US before moving to Norway. Assume it pays $1,875 a month, $22,500 a year (an assumed payout, not a quote). The US uses the exclusion ratio: expected return is $22,500 x 20.0 (the life-expectancy multiple at 65) = $450,000, so $300,000 / $450,000 = 66.7% of each payment is a non-taxable return of premium.
| Per year | US return (citizen) | Norwegian return (resident) |
|---|---|---|
| Payment received | $22,500 | $22,500 |
| Taxable amount | $7,500 (one third) | $22,500 (gross, Skatte-ABC F-24-5.1) |
| Rate | your bracket, for example 12% or 22% | 22% general income |
| Tax before credits | about $900 to $1,650 | about $4,950 |
Under the 1971 treaty there is no re-sourcing rule, so the US generally will not credit the Norwegian tax on this US-source annuity. Norway gives the credit instead (Article 23(2)(b)): the $900 to $1,650 of US tax should reduce the $4,950 Norwegian bill, leaving roughly the higher of the two in total, not both. Have a Norwegian tax adviser confirm the credit for your return. The 3.8% net investment income tax is different: foreign tax credits do not offset it under the Code, but it only applies above $200,000 of modified AGI (single) or $250,000 (joint), so most retirees are not affected.
If the SPIA was bought inside an IRA instead, every US dollar of it is taxable as ordinary income because there is no after-tax basis.
Norwegian tax rates you will meet (2026)
| Item | 2026 |
|---|---|
| Tax on general income | 22% |
| Bracket tax (on personal income such as wages and pensions) | 1.7% from NOK 226,101, rising in steps to 17.8% from NOK 1,467,201 |
| National insurance on pensions | 5.1% |
| Personal allowance (class 1) | NOK 108,550 |
| Shares: dividends and gains, effective | 37.84% |
| Wealth tax | 1.0% above NOK 1.9M per person |
A privately bought annuity is generally not personal income under skatteloven section 12-2, so it should bear the 22% rate without bracket tax or national insurance. Confirm that reading with a Norwegian adviser.
Practical setup
- Expect US withholding. Since January 1, 2026, a US citizen whose residence address is outside the US cannot opt out of federal withholding on annuity payments, even if they go to a US account (IRC 3405(e)(13), Treas. Reg. 31.3405(e)-1). Withholding is a prepayment, not extra tax; it is settled on your Form 1040. A US account is still the simplest landing spot for the payments.
- Buy the SPIA before you move. US insurers generally issue only to US residents in states where they are licensed.
- Social Security works across borders. The US-Norway totalization agreement has been in force since 1984, and US credits and Norwegian periods can be combined for eligibility in some cases.
- State tax. Leaving a state like California cleanly matters, because states do not credit Norwegian tax.
Checklist before you move
- Keep one US checking account and a US mailing arrangement for statements and IRS letters.
- Buy any SPIA while you still have a US address, have payments deposited to the US account, and set withholding at a level that matches your expected US tax.
- Sell or avoid foreign funds you would otherwise buy in Norway; hold US funds or individual shares instead.
- Calendar the FBAR (due April 15, automatic extension to October 15) and Form 8938 with your 1040.
- Keep your Social Security deposit in the US unless you have confirmed international direct deposit for Norway.
- Track days in Norway: residence starts at more than 183 days in 12 months or 270 days in 36 months.
One trade-off to state plainly: you will file in two countries every year. The SPIA keeps that simpler, not simpler to zero.
Frequently asked questions
Free annuity gap analysis for Norway. Tell me your ages, your Social Security or pension, and whether you are single or a couple. I will show how far your income is from the Norway requirement and what a lifetime annuity would cost to fill the gap, in the sponsor’s or main applicant’s name where that matters.
Related reading
- Moving to Norway from the US: the hub
- Norway wealth tax and the US annuity exception
- Norway exit tax on IRAs and 401(k)s
- FBAR, FATCA and double taxation for a US annuity
- Why a US SPIA is tax-favored: the exclusion ratio
Sources
- IRS: United States and Norway income tax convention (Articles 18, 19, 21, 22)
- IRS: Comparison of Form 8938 and FBAR requirements
- 26 U.S.C. 3405 (withholding on pensions and annuities; see also Treas. Reg. 31.3405(e)-1, T.D. 10008)
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
- Skatteetaten, Skatte-ABC F-24 Livrenteforsikring (F-24-2.1 wealth, F-24-5.1 income)
- Skatteetaten, Skatte-ABC F-24-5.1 (income tax on annuity payments)
- Skatteetaten: Tax on general income 2026
- SSA: Totalization agreement with Norway (archived copy)
Goldstein & Co. LLC dba Goldstein Insurance Services · Hans Goldstein, licensed insurance agent, CA lic. #4273294 · NPN 20602398 · 213-414-2808 · hans@hansgoldstein.com
Education, not tax, legal or immigration advice. Rules, thresholds and exchange rates change; confirm with the consulate or immigration authority and a local tax adviser before you act, and get answers in writing. Hans Goldstein is a licensed insurance agent (CA 4273294) and can only offer annuities to residents of states where he is licensed. Annuity payments are guaranteed by the issuing insurer’s claims-paying ability, not by any government. Payout figures are illustrations from a published survey, not quotes. Immediate annuities are generally irrevocable.