Portuguese income tax for US citizens

What Portugal will charge on your American income in 2026: Social Security, IRA and 401(k) withdrawals, remote work, 1099 freelance, brokerage income and US rental property, in dollars, with the treaty treatment shown line by line. It estimates Portuguese tax only. You still file a US return.

2026 rules · explainable output

Your income and situation

Annual amounts for 2026, in US dollars unless a field says euros.

An estimate, not tax advice. Where the US-Portugal treaty or Portuguese law does not settle a question for certain, this page picks the cautious answer and marks it “to be confirmed by our accountant”.

Household and currency

Where you live, how you file, the exchange rate

Where in PortugalMadeira and the Azores have their own progressive rates.

Filing statusJoint filing splits household income in two before the rates apply.

Euros per US dollarA placeholder, not a quote. Replace it with the rate you want to use.

Ages of dependent childrenOn 31 December, separated by commas, e.g. 6, 2, 1.

Parents or grandparents living with youEach qualifying ascendant is a deduction from the tax.

US retirement income

Social Security, IRA, 401(k), Roth

US Social Security

Annual benefit received.

IRA / 401(k) withdrawals

Regular withdrawals from traditional accounts.

Employer pension or annuity

From past employment.

401(k) or IRA lump sum

A one-off withdrawal of a large amount.

Roth IRA / Roth 401(k)

Distributions received this year.

Portuguese treatment of Social SecurityTreatment to be confirmed by our accountant.

Portuguese treatment of a 401(k) lump sumTreatment to be confirmed by our accountant.

Portuguese treatment of Roth distributionsTreatment to be confirmed by our accountant.

US tax paid on Social Security

Federal tax you paid or expect to pay on it. Used for the Portuguese credit only.

US tax paid on IRA / 401(k) / pension

Used only if you tick the box below.

Assume Portugal credits US tax on these pensionsThe treaty gives Portugal the sole right to tax a private pension, so the default is no credit. Treatment to be confirmed by our accountant.

Work income

Remote work, freelance, Portuguese payroll

US salary or remote work

Earned while you live in Portugal.

1099 freelance revenue

Gross receipts, before expenses.

Portuguese salary

€

Gross, from a Portuguese employer.

Investments and property

Brokerage, interest, US rental

US dividends

US interest

US rental income, net

After the expenses you can document.

Gains on shares held under 365 days

Net of losses.

Gains on shares held 365 days or more

Net of losses.

28% flat rate or aggregationAggregation means taxing these at the normal brackets.

The rental is a residential lease25% instead of 28%.

US tax paid on dividends and interest

Credit is capped at the treaty's 15% and 10%.

US tax paid on gains

US tax paid on rent

Assume a credit for US tax on gainsTreatment to be confirmed by our accountant.

Assume a credit for US tax on rentTreatment to be confirmed by our accountant.

Deductions from the tax

Invoices that carry your Portuguese NIF, in euros

Health expenses

€

15% back, up to 1,000 euros.

Education expenses

€

30% back, up to 800 euros.

General household expenses

€

35% back, up to 250 euros per taxpayer.

Apply the minimum of existence2026 threshold 12,880 euros. Applies when most of your income is salary, self-employment or pension income.

Special regimes

IRS Jovem and IFICI (NHR 2.0), with their conditions

IRS Jovem, the young-worker exemptionAge 18 to 35 on 31 December, employment or self-employment income, up to ten benefit years, capped at 29,542.15 euros. Not available to anyone who has ever held NHR or IFICI.

IFICI, the regime that replaced NHR20% flat on qualifying employment and self-employment income, and most foreign investment income exempt, for up to ten years. It is open by activity, not by arrival date.

2026 income · continental PortugalIncome year 2026

Estimated Portuguese tax€12,738$14,154 at 0.9 euros per dollar · 23.6% of your income, IRS plus Social Security

IRS (income tax)€12,73823.6% effective · top slice 43.1%

Social Security€0Self-employed 21.4% on 70%, not IRS

Income after Portuguese tax€41,262$45,846

Gross income€54,000$60,000

Want an accountant to do this properly? The treaty questions marked below are the ones we settle for you.

Start free →

How the tax builds up

In euros

Gross income, converted to euros€54,000.00

Specific deduction− €4,587.09

Taxable income at the progressive rates€44,012.91

Tax on the brackets€11,226.34

Flat-rate tax on investment income and rent€1,512.00

Estimated IRS€12,738.34

Social Security (separate from IRS)€0.00

Total Portuguese tax€12,738.34

How your income fills the brackets

Progressive table

12.5% · from €0

€1,042.75

15.7% · from €8,342

€666.47

21.2% · from €12,587

€1,113.21

24.1% · from €17,838

€1,265.49

31.1% · from €23,089

€1,961.79

34.9% · from €29,397

€4,778.86

43.1% · from €43,090

€397.77

Only the part of your income inside each bracket is taxed at that bracket's rate. Nobody pays 48% of everything.

Which is cheaper: 28% flat or englobamento

Investment income, gains and rent

Treatment	IRS	Note
28% flat (autonomous)	€12,738.34	Cheaper
Aggregated at the brackets	€13,596.44
Best mix, category by category	€12,738.34	Used when you pick “whichever is cheaper”

The 28% flat rate saves you €858. Aggregation is all or nothing within a category, raises your declared income (which can cost means-tested benefits), and turns the 28% withholding into a payment on account. US dividends count in full; the 50% inclusion is for Portuguese dividends.

Your US income and the treaty

Treatment in this estimate

Income	Amount	How it is treated
US Social Security	$24,000	Pension income (Category H), with a credit for US tax paidTo be confirmed by our accountant
IRA and 401(k) withdrawals	$30,000	Pension income (Category H). Treaty art. 20(1)(a): only Portugal may tax a private pension
US dividends and interest	$6,000	28% flat or aggregated. Treaty caps the US share at 15% (dividends) and 10% (interest)

Special regimes

Eligibility on your answers

–IRS Jovem: Not selected.

–IFICI: Not selected. You must become a Portuguese tax resident and not have been resident in any of the previous five years. Your activity must be on the qualifying list (EBF art. 58-A n.1 a to g, Portaria 352/2024/1). You must not have held NHR, and must not have opted for CIRS art. 12-A.

Assumptions in this estimate

Read before relying on it

✓Rates: continental Portugal table for 2026, with the solidarity surcharge above 80,000 euros.

!To be confirmed by our accountantUS Social Security is included here as pension income (Category H). The treaty lets the US tax it (art. 20(1)(b)), but whether Portugal also taxes it, and how, is treatment to be confirmed by our accountant. This is the conservative default; it never understates your Portuguese tax.

✓IRA, 401(k) and employer-pension withdrawals are a private pension from past employment: under treaty art. 20(1)(a) only the state of residence, Portugal, may tax them. They are taxed here as Category H pension income. The US still taxes its citizens on them, and relieves that on your US return.

iYou still file a US return, Form 1040, on your worldwide income, and FBAR and Form 8938 where they apply. This page estimates Portuguese tax only and does not compute your US tax.

Not modelled

Rent, mortgage-interest, care-home, alimony and invoice-requirement deductions.
The 5% uplift on the global deduction ceiling for households with three or more dependants.
Retirement-savings (PPR) deductions, and organised-accounting Category B.
Municipal surcharge (derrama) is a company tax and does not apply here.
Share-gain inclusion tiers under CIRS art. 43 n.3 (not yet measured by us): share gains are taken at 100%.
The minimum-of-existence mechanics beyond the 2026 threshold of 12,880 euros (approximated, single filers only).
Long-lease reduced rental rates (5% to 15%): not applied to US property.
The exchange rate above is a placeholder, and the rate used on a real return may differ.

Your US return, for context

Not computed here

The US taxes its citizens on worldwide income wherever they live, so Form 1040 is still due. The treaty's saving clause lets the US keep taxing you as a citizen; it relieves double tax, it does not end the US filing.
Two US reliefs are usually weighed against each other: the foreign earned income exclusion (Form 2555, $132,900 per person for 2026, earned income only, so not Social Security, pensions, dividends or gains) and the foreign tax credit (Form 1116). Which is better depends on your Portuguese rate, your income types and your plans.
Foreign bank accounts above $10,000 in total at any point in the year go on an FBAR (FinCEN 114), and Form 8938 may apply.

Calculation sources

Código do IRSArt. 68 rates, art. 68-A surcharge, arts. 25, 31, 70, 78 to 81 Código dos Regimes ContributivosSelf-employed Social Security, arts. 145, 162, 163, 168 Estatuto dos Benefícios FiscaisIFICI, art. 58-A Madeira ratesDLR 3/2001/M art. 2, as amended for 2026