🇰🇷 COUNTRY A South Korea VS 🇺🇸 COUNTRY B USA

The Foreign Earned Income Exclusion (FEIE, IRS Form 2555) allows US citizens who meet the physical presence test (330 days in a foreign country) or bona fide residence test (established foreign resident) to exclude up to $130,000 (2025, indexed to inflation) of foreign earned income from US federal tax. For an American in Seoul earning ₩100M (~$75,000) in salary, the FEIE covers the entire amount — resulting in $0 US federal income tax on that salary. The FEIE cannot be applied to investment income, passive income, or self-employment income above the exclusion limit. A Foreign Housing Exclusion/Deduction can additionally exclude housing costs above a base amount. Alternatively, the Foreign Tax Credit (Form 1116) credits Korean taxes paid against US tax liability — often more efficient for higher earners where Korean rates exceed US rates.

Yes — the United States and South Korea have a Comprehensive Income Tax Treaty. Key provisions: employment income taxed where work is performed (subject to FEIE/FTC elections); business profits in country of operation; dividends 10–15% withholding at source; interest 12% withholding; royalties 10–15%; government service income taxed in country of government. The treaty totalization agreement for social security prevents dual contributions in most cases — US workers in Korea under the agreement generally pay into the Korean national pension system (or their US Social Security, depending on which system covers them). The US-Korea treaty also provides protections for US pensions paid to Korean residents.

FBAR (Foreign Bank Account Report, FinCEN Form 114): any US citizen with foreign bank or financial accounts totaling more than $10,000 at any point in the calendar year must file an FBAR annually. Penalties for non-filing can be severe ($10,000–$100,000+). FATCA (Foreign Account Tax Compliance Act, Form 8938): US citizens with specified foreign financial assets above $50,000 (single, in US) or $200,000 (abroad) must report them to the IRS. Americans in Seoul with Korean bank accounts, brokerage accounts, or investments almost certainly exceed these thresholds. FBAR is filed with the Financial Crimes Enforcement Network; Form 8938 is filed with the tax return. The combination of FBAR, FATCA, and US worldwide taxation creates significant compliance burden for Americans living in Korea.

Korean nationals who become US residents are generally subject to US worldwide taxation on all income from the date of US residency establishment. Korean-source income (Korean salary, Korean dividends, Korean real estate income) paid to US residents: the Korea-US DTA determines withholding at source in Korea and credit/exemption in the US. Korean nationals with RRSP/ISA equivalents (Korea's Individual Savings Account — ISA) should verify US treatment of those accounts. Importantly, Korean nationals who become US Green Card holders or citizens acquire US worldwide tax obligations — including on Korean pension (NPS) withdrawals, Korean property gains, and Korean investment income. Cross-border tax planning is strongly recommended for Korean nationals immigrating permanently to the US.