Kuwait has no US tax treaty and no totalization agreement.
Americans in Kuwait pay no Kuwaiti income tax, so there is no foreign tax credit to claim. The Foreign Earned Income Exclusion — $130,000 for tax year 2025 — and the foreign housing exclusion carry the whole return, and self-employment income stays fully subject to US SECA tax.
Tax snapshot — Kuwait
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Sources: IRS Publication 54; IRS Publication 901; Rev. Proc. 2025-32; 31 CFR 1010.350. Checked 28 August 2026.
What that means on your return
With no Kuwaiti income tax, the usual expat safety net is gone. Every dollar above the exclusion is taxed at US rates with nothing to credit against it, so the housing exclusion and your day-count stop being paperwork and start being the number.
Employer-provided housing counts as foreign earned income, and it also counts as a qualified housing expense. Claimed properly, the two facts cancel much of each other out. Left unclaimed, you pay tax on an apartment you never chose.
If you arrived or left mid-year, the 330-day physical presence test is tested across a rolling 12-month period, not the calendar year. Choosing the right 12 months is often worth more than any deduction on the return.
If you are in Kuwait as a…
Questions I get about Kuwait
Does my employer-provided apartment count as income?
Yes. Its value is foreign earned income. It is also a qualified housing expense, so the foreign housing exclusion is the offset — but only if it is claimed on Form 2555.
Do I pay self-employment tax on consulting work in Kuwait?
Yes. There is no totalization agreement with Kuwait, so 15.3% SECA applies to net self-employment income even when the exclusion removes the income tax.
Do I owe US tax if Kuwait taxes nothing?
You file, and often you owe nothing. The Foreign Earned Income Exclusion covers $130,000 of earned income for tax year 2025, and the foreign housing exclusion can cover more. Above that, US tax applies with no foreign tax credit available.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Kuwaiti bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Kuwait this year?
Twenty minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 17 years in practice, 12 of them as an Enrolled Agent.