Did the Cost to Renounce U.S. Citizenship Just Drop?

Yes. On March 13, 2026, the U.S. State Department issued a final rule reducing the fee for renouncing U.S. citizenship from $2,350 to $450, an 80% reduction. The new fee takes effect April 13, 2026 (30 days after publication in the Federal Register).

This ends a six-year legal battle by Americans abroad, led by the Association of Accidental Americans (AAA), who argued the $2,350 fee was unconstitutional and prevented people from exercising their right to renounce.

Here is what changed, what did not change, and what every American abroad should consider before making this decision.

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What Changed

The State Department reduced the administrative fee for processing a Certificate of Loss of Nationality (CLN) from $2,350 to $450. This is the fee you pay at your consulate appointment when you take the oath of renunciation.

Detail	Old Rule	New Rule
Renunciation fee	$2,350	$450
Effective date	In place since 2014	April 13, 2026
Where you pay	U.S. Embassy or Consulate abroad	Same
Refundable?	No	No

Timeline note: If your renunciation appointment is before April 13, 2026, you will be charged $2,350. The $450 fee applies to appointments on or after April 13, 2026. If you already have an appointment scheduled in the next 30 days, you may want to ask your consulate about rescheduling.

Fee history: Before 2010, renunciation was free. From 2010 to 2014, the fee was $450. In 2014, the State Department raised it to $2,350, citing increased demand. The new rule returns the fee to the 2010-2014 level.

What Did NOT Change

The fee reduction is strictly an administrative cost change. Every tax obligation related to renunciation remains exactly the same:

Exit tax rules are unchanged: If you are classified as a “covered expatriate,” you may owe an exit tax on unrealized gains above $910,000 (2026 exclusion amount). The three covered expatriate tests remain: net worth over $2 million, average annual net income tax over $206,000 (2025 threshold), or failure to certify five years of tax compliance.
Form 8854 is still required: You must file this form with your final tax return to certify tax compliance and determine covered expatriate status. The $10,000 penalty for failing to file Form 8854 is unchanged.
The five-year compliance requirement is unchanged: You must be current on all U.S. tax returns and FBARs for the five years before renunciation. If you cannot certify compliance, you are automatically classified as a covered expatriate, regardless of your net worth.
FBAR and FATCA obligations apply through your renunciation date: Foreign account reporting continues until the day you formally renounce.
The process itself remains unchanged: You must still appear in person at a U.S. Embassy or Consulate, take the oath of renunciation, and wait for the State Department to issue your Certificate of Loss of Nationality (CLN).

Why the Fee Was Reduced

The State Department cited two reasons in the final rule:

Cost burden on Americans abroad: The department acknowledged that the $2,350 fee was significantly higher than the actual cost of providing CLN services and was creating a barrier for people exercising their right to renounce.
FATCA-related difficulties: The rule specifically referenced “the not insignificant anecdotal evidence regarding the difficulties many U.S. nationals residing abroad are encountering” due to stricter financial reporting requirements under the Foreign Account Tax Compliance Act (FATCA). Many Americans abroad have faced bank account closures, mortgage denials, and investment restrictions because foreign banks do not want to deal with U.S. reporting requirements.

The Association of Accidental Americans filed a complaint in 2020 challenging the constitutionality of the $2,350 fee and, in January 2026, sued the State Department to compel publication of the final rule.

Should I Renounce Now That the Fee Is Lower?

A lower fee does not make renunciation the right decision for most Americans abroad. Before considering this permanent and irreversible step, understand what you give up:

The right to live and work in the U.S. without immigration restrictions
Access to Medicare
U.S. consular protection abroad
U.S. passport privileges
The ability to easily visit family in the U.S.

For most expats, staying compliant is simpler and less expensive than renouncing. The Foreign Earned Income Exclusion ($130,000 for 2025, $132,900 for 2026) and the Foreign Tax Credit eliminate U.S. tax liability for the vast majority of Americans abroad. Professional expat tax preparation typically costs $530 to $700 per year. Compare that to the permanence of renunciation, and for most people, filing is the better path.

If you are behind on filing, the IRS Streamlined Filing Compliance Procedures allow you to catch up on three years of tax returns and six years of FBARs with no penalties. Many Americans who thought renunciation was their only option discover that getting compliant is straightforward and that they owe little or nothing.

If you are considering renunciation, work with a tax professional before you schedule your consulate appointment. You must be five-year compliant before you can file Form 8854 and determine whether you owe an exit tax. Renouncing without completing this step can result in automatic covered expatriate status and significant tax liability.

What About Accidental Americans?

Accidental Americans are people who hold U.S. citizenship by birth but live abroad with no meaningful connection to the U.S. For this group, the fee reduction is especially significant.

Many accidental Americans have faced years of banking difficulties, tax complexity, and financial barriers because of their U.S. citizenship. The $2,350 fee was a final obstacle for those who had already decided to renounce. At $450, the process becomes financially accessible for a much larger group.

However, accidental Americans still face the same compliance requirements before renouncing. If you have never filed U.S. tax returns, use the Streamlined Filing Procedures to catch up first. Filing three years of returns and six years of FBARs with no penalties is far better than renouncing without compliance and triggering automatic covered expatriate status.

Frequently Asked Questions

How much does it cost to renounce U.S. citizenship in 2026?

As of April 13, 2026, the State Department fee to renounce U.S. citizenship is $450. This is an 80% reduction from the previous fee of $2,350, which had been in place since 2014. The fee covers the administrative processing of your Certificate of Loss of Nationality (CLN) and is paid at your renunciation appointment at a U.S. Embassy or Consulate abroad. The fee is non-refundable. You may also need legal or tax preparation assistance, which adds to the total cost. For a complete breakdown, see our guide: Renouncing U.S. Citizenship: Costs, Tax Implications, and Requirements

Do I owe taxes when I renounce U.S. citizenship?

You may owe an exit tax if the IRS classifies you as a “covered expatriate.” You are a covered expatriate if your net worth exceeds $2 million, your average annual net income tax for the prior five years exceeds $206,000 (2025 threshold), or you cannot certify five years of full U.S. tax compliance on Form 8854. The exit tax applies to unrealized gains above $910,000 (2026 exclusion). Most Americans who renounce do not owe the exit tax. You must also file a final U.S. tax return for the year of renunciation.

When does the $450 fee take effect?

April 13, 2026 (30 days after the final rule was published on March 13, 2026). Appointments before April 13 are charged $2,350. Appointments on or after April 13 are charged $450.

Can I get a refund if I already renounced at the $2,350 rate?

The final rule does not provide for refunds of previously paid fees. The Association of Accidental Americans has filed a class-action lawsuit seeking refunds for former citizens who paid the $2,350 fee, but the outcome of that lawsuit is pending.

Does the lower fee change the exit tax?

No. The exit tax rules are completely separate from the administrative fee. The covered expatriate thresholds ($2 million net worth, $206,000 average tax liability, five-year compliance), the $910,000 gain exclusion (2026), and Form 8854 filing requirements are all unchanged.

Should I wait until April 13 if I have an appointment before then?

If your appointment is within the next 30 days and rescheduling is possible, waiting could save you $1,900. Contact your consulate to ask about rescheduling. However, consulate appointment availability varies widely by location, and some have waiting lists of several months. Weigh the cost savings against the delay.

Do I still need to be tax-compliant for 5 years before renouncing?

Yes. This requirement is unchanged. You must file all required U.S. tax returns, FBARs, and information returns for the five years before your renunciation date. If you cannot certify compliance on Form 8854, you are automatically a covered expatriate. If you are behind, use the Streamlined Filing Procedures to catch up before scheduling your renunciation appointment.

Is renunciation the right choice for me?

For most Americans abroad, no. The FEIE and Foreign Tax Credit eliminate U.S. tax liability for the vast majority of expats, and staying compliant gives you the flexibility to return to the U.S. whenever you choose. Renunciation is permanent and irreversible. It is best suited for people who have no intention of ever living in the U.S. again and who face significant ongoing difficulties (banking restrictions, FATCA complications) that outweigh the benefits of citizenship. See our full guide: Renouncing U.S. Citizenship: Costs, Tax Implications, and Requirements

Whether You Stay or Go, Get Expert Help

Whether you are considering renunciation or simply want to make sure your expat taxes are filed correctly, Greenback can help. Our CPAs and Enrolled Agents specialize in exactly these situations: exit tax planning, Form 8854 preparation, Streamlined Filing for those who need to catch up, and ongoing expat tax compliance for those who choose to keep their citizenship.

If you are ready to be matched with a Greenback accountant, get started here. For general questions about renunciation or expat taxes, contact our Customer Champions.

Renouncing U.S. Citizenship Requires Tax Compliance

Greenback’s expat tax experts help ensure your final filings and Form 8854 are completed correctly.

This article is for informational purposes only and does not constitute legal or tax advice. Renouncing U.S. citizenship is a permanent and irreversible decision with significant legal, financial, and personal consequences. Always consult with a qualified tax professional and, where appropriate, an immigration attorney before making this decision.