Retiring or living long-term in China as a U.S. citizen (or green card holder) — how do taxes work in both countries?

Under Article 1 of China's Individual Income Tax Law, a person who is domiciled in China, or who has no domicile but spends a total of 183 days in China in a tax year, is a "resident individual." The tax year is the calendar year. Under MOF/SAT Announcement No. 34 of 2019, a day counts only if you are in China for the full 24 hours, so arrival and departure days generally don't count.

This guide uses a common situation as its example. A married couple, both U.S. citizens, own a home in the U.S. and keep their U.S. bank and brokerage accounts. They plan to rent an apartment in China for a 1–2 year trial. They hold 10-year multiple-entry visas that allow stays of up to 180 days each. All of their income is U.S.-source and paid into U.S. accounts: rent from a U.S. property, Social Security, a commercial annuity, Treasury interest, and dividends and capital gains from a brokerage account. They have no Chinese-source income.

Many people assume "under 180 days per stay" keeps them safe. But the visa counts each stay; the tax law counts the total days in each calendar year. Leave for a few days and come back, and two stays in the same year can add up to more than 300 days.

Description: every stay is under 180 days, but counting by calendar year gives very different results. Only full 24-hour days count.

Pattern	Entry and exit	Days that count (full 24 hours)	Total for the year	Result
A: one stay a year	Enter March 1, 2027; leave August 27	March 2 to August 26: 178 days	178	Under 183; a nonresident individual for 2027
B: two stays in one year	Enter January 5, 2027; leave July 3; 10 days in Japan; enter July 13; leave December 20	First stay January 6 to July 2: 178 days; second stay July 14 to December 19: 159 days	337	183 or more; a resident individual for 2027, and the 6-year count starts
C: stays across year end	Enter July 1, 2027; leave December 27; enter January 10, 2028; leave July 7; come back for 10 days on October 1	2027: 178 days. 2028: January 11 to July 6, 178 days, plus October 2 to 9, 8 days	2027: 178; 2028: 186	Under in 2027; one short extra trip pushes 2028 over 183

• Keep a log every year: write down each entry and exit date, total them by calendar year, and plan travel before you get close to 183.
• Arrival and departure days: usually under 24 hours, so they don't count. Even a short trip out between two stays drops the first and last day of each stay.
• 183 days doesn't automatically mean tax: it makes you a resident individual, but someone without a domicile still has the "6-year rule" below, so U.S.-source income paid from the U.S. is generally still exempt.

Under Article 4 of the IIT Law's Implementing Regulations, an individual with no domicile in China whose 183-day years have not yet run six consecutive years is exempt on income from sources outside China paid by foreign entities or individuals, after filing a record with the competent tax bureau. If, in any 183-day year, a single trip out of China lasts more than 30 days, the consecutive count starts over. A 1–2 year trial with all income paid from the U.S. generally creates no Chinese income tax.

Announcement No. 34 spells it out. For a year with 183 or more days, look back at the "prior six years" (the previous one to six years). If you spent 183 days in China in each of those six years and never had a single trip out longer than 30 days, this year's income from inside and outside China is all taxable in China. If any of those six years was under 183 days or included a single trip out longer than 30 days, this year's foreign-source income paid from abroad is exempt. The six-year look-back can't start earlier than 2019.

Description: start counting with the first 183-day year. Six straight 183-day years with no single trip out longer than 30 days means foreign income is taxable in China from year 7. One break restarts the count.

Year	What happened	U.S.-source income paid from the U.S., in China
2027	183+ days, no single trip out over 30 days (year 1)	Exempt, after a filing with the tax bureau
2028–2032	183+ days each year, no single trip out over 30 days (years 2–6)	Exempt, after a filing with the tax bureau
2033	183+ days; 2027–2032 were all 183+ days with no trip out over 30 days	Worldwide income taxable in China
Alternative: 2029	183+ days, but 45 days back in the U.S. over the summer	The trip out exceeded 30 days, so the count restarts in 2030

• A month-plus back in the U.S. each year resets the clock: that's simply how the rule works, and many people who go back each year to see doctors or family meet it naturally.
• The 6-year rule protects only income from foreign sources paid from abroad: U.S. rent, Social Security, annuity payments, Treasury interest, and dividends and gains on U.S. stocks paid by U.S. institutions into U.S. accounts generally fall into this group. Fees for teaching or consulting in China are Chinese-source and taxable in China however many days you spend there.
• Don't skip the filing: the regulation says the exemption applies "after filing a record with the competent tax bureau." The procedure and timing aren't spelled out and may differ by locality. In your first 183-day year, ask the tax bureau where you regularly live (see "Do I have to file in China?" below).

Under Article 2 of the Implementing Regulations, a person is domiciled in China if they habitually reside there because of household registration, family or economic interests. A foreign national has no Chinese household registration, so the question is whether your family and economic ties are in China and whether China has become your long-term home. It's a facts-and-circumstances test decided by the local tax bureau; no day count guarantees the answer.

An older State Taxation Administration circular (Guoshuifa [1994] No. 89) described "habitual residence" as a legal standard rather than where you happen to live at a given time: someone who lives abroad to study, work, visit family or travel, and must return to China once that reason ends, habitually resides in China. How local bureaus apply the test today should be confirmed with the bureau itself.

Being found domiciled has the same effect as running out the six years, only sooner:

• Resident from day one: a domiciled person is a resident regardless of days, with no 6-year relief.
• Worldwide income reported in China: U.S. rent, annuity, interest, dividends and gains, filed each year between March 1 and June 30, with credit for U.S. tax under the rules (Social Security excepted under the treaty, see below).
• Possible back years: if the bureau decides you were domiciled earlier, it may assess earlier years with a late-payment surcharge (0.05% per day under Article 32 of the Tax Collection and Administration Law).

So during a trial stay, keep the evidence that your life is centered in the U.S.: the U.S. home, accounts, doctors and driver's license. Rent in China and hold off on buying.

Both countries decide on the facts, and the facts come from records. The most important are your days in China, where you live there, and proof of U.S. tax paid. Keep them until the years involved are closed in both countries; we suggest 10 years.

Proof of days in China

• Entry and exit stamps and visa pages in your passport; photograph them after each trip.
• An official record of your entries and exits, which you can request from the immigration authorities. Check your count against it at year end.
• Your own travel log: one table per year listing entry and exit dates and the full 24-hour days.
• Airline tickets and itineraries.

Proof of where you live

• Your Chinese lease and rent payment records. A foreign national staying in rented housing must register with the local police within 24 hours of arrival (Article 39 of the Exit and Entry Administration Law); keep the registration receipt.
• U.S. home ownership documents and utility bills, your U.S. driver's license, voter registration, and medical and insurance records.

Proof of income and U.S. tax paid

• Every year's complete Form 1040, IRS account transcripts, and payment confirmations (EFTPS, Direct Pay or bank records).
• SSA-1099 (Social Security), 1099-R (annuity), 1099-INT (Treasury interest), 1099-DIV and 1099-B (brokerage), and rental income and expense records with Schedule E.
• Annual brokerage statements and cost basis for every trade. If China taxes a sale as a property transfer, it taxes proceeds minus original cost, and the cost needs support.
• To credit U.S. tax in a future Chinese filing, Article 10 of Announcement No. 3 of 2020 calls for the foreign tax authority's tax certificate or payment receipt, or the foreign return plus payment records. The IRS doesn't issue a "tax clearance certificate" of that kind, so in practice this means your 1040, IRS transcripts and payment records.

If you spend fewer than 183 days a year and have no Chinese-source income, you have no filing obligation in China. In a 183-day year within the 6-year window, U.S.-source income paid from the U.S. is exempt, but the regulation requires a filing with the tax bureau. If you are found domiciled, or once the six years run out, you report foreign income between March 1 and June 30 of the following year. Chinese-source income is taxable however long you stay.

Description: at the end of each year, check your days and facts and find the matching row.

That year	Chinese tax status	U.S.-source income paid from the U.S.	What to do
No domicile, under 183 days	Nonresident individual	Not taxed in China	No filing if no Chinese-source income; keep your day log
No domicile, 183+ days, within the 6-year window	Resident individual	Exempt	File the record with the tax bureau where you regularly live; ask in advance how it's done and whether a return is also needed
No domicile, 7th straight 183-day year (no trip out over 30 days in the prior six)	Resident individual	Taxable	Report foreign income March 1 to June 30 of the next year, with credit for U.S. tax
Found domiciled	Resident individual (days don't matter)	Taxable	Same; earlier years may be involved
Chinese-source income (teaching, consulting)	Any	—	Usually withheld by the payer, or self-reported

• Where to file: under Article 8 of Announcement No. 3 of 2020, someone without Chinese household registration files with the tax bureau where they regularly live in China.
• Currency conversion: Article 32 of the Implementing Regulations uses the RMB central parity rate.
• Interest on Chinese bank deposits: currently exempt from individual income tax (Caishui [2008] No. 132), so a Chinese account for living expenses doesn't by itself add tax.
• Opening a Chinese bank account: the bank will usually ask you to declare your tax residence, and U.S. citizens are asked for U.S. taxpayer information (a FATCA requirement). The U.S. doesn't participate in CRS, so your U.S. accounts aren't automatically exchanged with China under CRS. The treaty does have an exchange-of-information article, though, and "no automatic exchange" is never a reason not to file.
• China is stepping up enforcement on foreign income: since 2025, tax bureaus in many areas have reminded resident individuals to report foreign income. Once you reach a year that requires a filing, don't wait to be contacted.

Under Article 2 of Announcement No. 3 of 2020, a resident's foreign interest, dividends, rental income and property transfer gains are not combined with Chinese income; each is computed under its own rules, at 20%. Social Security is taxable only by the U.S. under the treaty. How China classifies a commercial annuity isn't clearly settled. U.S. tax paid can be credited, with the limit computed country by country and any excess carried forward 5 years.

Description: the "China" column applies only in years when China taxes you (domiciled, or no domicile but past the six years).

Income	U.S. side	China side	U.S.–China treaty
Rent from U.S. property	Schedule E; deduct depreciation, mortgage interest, property tax, insurance and repairs; taxed on net	Property leasing income, with one month's rent as one payment: deduct RMB 800 if the payment is RMB 4,000 or less, otherwise 20%; taxed at 20%. No deduction for depreciation or mortgage interest	Art. 6: the U.S., where the property is, may tax; China credits as the residence country
Social Security	Up to 85% taxable	Taxable only by the U.S. under the treaty; China doesn't tax it	Art. 17(2)
Commercial annuity	Taxable portion on Form 1099-R	Classification unclear; Chinese law doesn't address it directly. Confirm with a Chinese tax professional	Art. 17 covers only employment pensions and social security; a privately bought annuity may fall under Art. 21 (other income), where both countries may tax. Uncertain
Treasury interest	Federal tax; state-exempt	Interest income, 20% per payment. China's exemption for government bond interest applies only to Chinese government bonds	Art. 10: source-country tax on an ordinary Chinese resident capped at 10%
Dividends on U.S. stocks and funds	Qualified dividends at 0%, 15% or 20%; others at ordinary rates	Dividend income, 20% per payment	Art. 9: source-country tax on an ordinary Chinese resident capped at 10%
Gains on stock and fund sales	Capital gains; long-term rates after more than a year	Property transfer income at 20%, on proceeds minus cost and reasonable expenses. The rules don't say whether gains and losses within a year can be netted; 2025 media reports quoted a tax bureau saying same-year netting is allowed but not across years. Follow your local bureau	Art. 12(6)

Rent on a U.S. property can cost more in China than in the U.S.

Example (hypothetical numbers, to show the method): rent is $3,000 a month, about RMB 21,300 at 7.1. That's over RMB 4,000, so 20% is deducted and 80% is taxed. Monthly tax is about 21,300 × 80% × 20% = RMB 3,408, or about RMB 40,900 a year: 16% of gross rent. In the U.S., after depreciation, mortgage interest and property tax, taxable net rent on the same property may be a small fraction of the gross. China credits only the U.S. tax actually paid on that rent. China taxes residential rentals inside China at a reduced 10%, but we haven't seen clear guidance on whether that applies to a home abroad.

How much U.S. tax can China credit?

• A per-country limit: under Article 3 of Announcement No. 3, the limits for each category of U.S. income are added together into one limit for the U.S. For interest, dividends, rent and property transfers, the limit is the Chinese tax computed on that income.
• Carryforward: U.S. tax above the limit can be used in the next 5 years against unused U.S. limits.
• Tax not allowed by the treaty isn't creditable: Article 4 of Announcement No. 3 excludes foreign tax that shouldn't have been levied under a treaty. Whether China credits the full U.S. tax a citizen actually pays, or only the treaty rate that applies to an ordinary Chinese resident (10% on dividends and interest), isn't addressed in any official guidance we've found. Confirm with a Chinese tax professional.

The U.S.–China treaty, signed in 1984 and in force since 1987, says in Article 17(2) that social security payments made by one country are taxable only in that country, so China does not tax U.S. Social Security. But paragraph 2 of the Protocol is a "saving clause": notwithstanding the treaty, the U.S. may tax its citizens. The treaty limits China's right to tax; it doesn't limit the U.S.'s right to tax its own citizens.

• If both countries treat you as resident: Article 4(2) leaves it to the two countries' competent authorities to decide by consultation, and Protocol paragraph 5 says they follow the UN Model tie-breaker (permanent home, center of vital interests, habitual abode, nationality, in that order). In theory, if your permanent home and center of vital interests are in the U.S., you could be treated as a U.S. resident under the treaty, limiting China's right to tax your U.S. income. But that means a competent authority request, which is slow and uncertain. Don't treat it as a routine plan.
• Treaty rates on dividends and interest: Articles 9 and 10 cap source-country tax on the other country's residents at 10%. That helps ordinary Chinese residents; because of the saving clause, the U.S. still taxes its citizens in full.
• How double tax is relieved: under Article 22(1), China credits U.S. tax payable "in accordance with the provisions of this Agreement," up to the Chinese tax on that income. Under Article 22(2), the U.S. credits Chinese tax under U.S. law. Article 22(3) treats income the other country may tax under the treaty as arising in that country.
• The catch for U.S. citizens: the 1984 treaty doesn't have the re-sourcing rule some newer treaties include for U.S. citizens living in the treaty country. Your income is U.S.-source, and the U.S. foreign tax credit (Form 1116) generally offsets only U.S. tax on foreign-source income, so Chinese tax on U.S.-source income often can't be credited in the U.S. If China ever taxes you, some double tax may be hard to eliminate. That's why staying non-domiciled and inside the 6-year window is the most important planning point.
• 401(k)s, IRAs and employer pensions: our example has none. If you do, Article 17(1) (employment pensions taxable only in the residence country) combined with the saving clause works differently from Social Security and needs its own analysis.

A U.S. citizen files Form 1040 every year on worldwide income, wherever they live, with the same filing thresholds as at home. Your income is pensions, Social Security and investments, not earnings from work, so the foreign earned income exclusion (FEIE, $132,900 for 2026) doesn't help. If China taxes you, Form 1116 claims a foreign tax credit, but generally not against U.S.-source income.

Filing and paying

• Due date: under IRS Publication 54, a U.S. citizen living outside the U.S. on April 15 generally gets an automatic extension to June 15, with a statement attached to the return. Interest on unpaid tax still runs from April 15. If you're in the U.S. on April 15, file Form 4868 to extend to October 15.
• Estimated tax: retirement income usually has too little withholding, so pay quarterly with Form 1040-ES (April 15, June 15, September 15, January 15), or ask for withholding on Social Security with Form W-4V (7%, 10%, 12% or 22%) and on the annuity with Form W-4P (see our guide on estimated tax at yclcpa.com/1040es). Annuity payments delivered to a foreign address may not allow you to opt out of withholding; payments into a U.S. account generally aren't affected.
• Extra deduction at 65+: the OBBBA adds a $6,000 deduction per person 65 or older for 2025 through 2028, phasing out above $150,000 of modified AGI for joint filers. Living abroad doesn't affect it. The 2026 standard deduction for joint filers is $32,200.
• NIIT of 3.8%: joint filers with modified AGI above $250,000 owe 3.8% on rent, interest, dividends and gains. Chinese tax generally can't offset it.

After opening Chinese accounts: FBAR and Form 8938

• FBAR: if your Chinese bank, brokerage and wealth-management accounts total more than $10,000 at their highest during the year, file FinCEN Form 114, due April 15 with an automatic extension to October 15. Spouses with joint accounts generally each file (see yclcpa.com/fbar).
• Form 8938: the "living abroad" thresholds require being a bona fide resident of a foreign country for the whole tax year, or being outside the U.S. for 330 full days in any 12 consecutive months ending in the year. Stays of 180 days with a U.S. home kept generally don't qualify, so the U.S. thresholds apply: joint filers more than $100,000 at year end or $150,000 at any time (see yclcpa.com/8938). U.S. bank and brokerage accounts aren't foreign assets.

State tax, Social Security, Medicare and refunds

• State tax: if you live in a state with no individual income tax, such as Nevada, Texas or Florida, keeping that state as your domicile (home, driver's license, voter registration) is the simplest position. If you're leaving a high-tax state such as California or New York, watch whether it keeps treating you as domiciled there.
• Collecting Social Security in China: under SSA's rules for payments abroad, U.S. citizens living in China can generally keep receiving benefits, deposited to their U.S. bank account. SSA periodically mails questionnaires to confirm identity and eligibility; answer on time or payments may be suspended. You can check your situation with SSA's Payments Abroad Screening Tool before you go.
• Medicare: it generally doesn't pay for care outside the U.S., so plan separate coverage in China. Whether to keep paying Part B premiums depends partly on the late-enrollment penalty if you re-enroll after returning. That's a health insurance question rather than a tax one; we mention it for completeness.
• Refunds and a U.S. address: the IRS deposits refunds only to U.S. bank accounts, so keeping a U.S. account is easiest. Keep a U.S. mailing address so IRS letters reach you; for refund checks mailed abroad, see yclcpa.com/refundcheck. Ask your broker before changing to a foreign address; some restrict trading for clients with foreign addresses.

Each of these changes the picture: buying a home in China raises the domicile risk; a green card holder living abroad long term faces immigration status and expatriation tax questions; and owning property in two countries means arranging wills and inheritance in both.

Buying a home in China

• A home you live in is a key fact for "economic interests" and "habitual residence." During a trial stay, rent first.
• The property itself isn't reported on FBAR or Form 8938 (directly held real estate isn't a financial asset). If you rent it out, the rent is Chinese-source and taxable in China, reported in the U.S. too, with a U.S. credit for the Chinese tax. A later sale is a capital gain on your U.S. return.

A spouse with a green card

• For U.S. tax, a green card holder is treated like a citizen: worldwide income, FBAR and Form 8938.
• Long periods abroad can lead immigration authorities to conclude permanent residence was abandoned (for example, an absence of more than a year). Whether to get a reentry permit and how to plan travel are immigration-law questions for an immigration attorney.
• A green card holder who held it in at least 8 of the last 15 tax years and gives it up, or is found to have abandoned it, may fall under the expatriation tax rules and file Form 8854 (see yclcpa.com/exittax). Claiming Chinese residence under the treaty can have the same result, so assess it first.
• If the green card spouse's domicile later moves out of the U.S., U.S. estate tax may treat them as a nonresident, with only a $60,000 exemption (see yclcpa.com/estate, which covers non-citizens domiciled outside the U.S.).

Estate planning

• A U.S. citizen's worldwide estate is subject to U.S. estate tax wherever they live; the 2026 exemption is $15,000,000, and property left to a U.S. citizen spouse can be deducted.
• As of October 2026, China has no estate tax, but Chinese bank accounts and property pass through Chinese procedures (usually with notarization), and U.S. accounts follow U.S. state law. Wills and trusts in each country are drafted by attorneys there; we coordinate on the tax side.

First count your days by calendar year, then find your situation. Conclusions on the Chinese side should be confirmed by a Chinese tax professional or the local tax bureau; the U.S. filings continue every year as usual.

• Situation A: just starting, under 183 days a year. Generally no Chinese filing. Log every entry and exit, keep the U.S. home, accounts and driver's license, and rent in China. File Form 1040 and pay quarterly estimates.
• Situation B: one year reached 183 days. You were a resident individual that year, but within the 6-year window U.S.-source income paid from the U.S. is exempt. Before June 30 of the next year, ask the tax bureau where you regularly live how the filing works, and have your 1040s and 1099s ready.
• Situation C: planning to stay long term, possibly six straight years. Track the 6-year count every year. If you don't want worldwide income taxed in China from year 7, one year with a single trip out longer than 30 days restarts the count. If you plan to stay, model the combined U.S. and Chinese tax first, especially on rent and investment income.
• Situation D: you've bought a home in China, or family and assets have moved. The domicile risk rises sharply, possibly reaching back to earlier years. Review those years promptly with a Chinese tax professional; we'll prepare the U.S. records.
• Situation E: you've opened Chinese accounts. Check FBAR (over $10,000 combined) and Form 8938 (joint filers $100,000 at year end or $150,000 at any time) each year; each spouse decides separately.