A child born in the United States during a parent’s assignment is a U.S. citizen, even if both parents are Japanese. When the family returns to Japan and the child grows up speaking only Japanese, the U.S. tax obligations that come with citizenship do not go away. People who reach adulthood barely aware that they are U.S. citizens, and discover it when a bank or employer asks, are known as accidental Americans. This article covers the current status of birthright citizenship, the lifelong filing duties of U.S. citizens (income tax, FBAR, and FATCA), the practical problems a citizen child living in Japan faces, the procedures for catching up on missed filings, and the option of renouncing citizenship. Rules are as of 2026.
A Child Born in the U.S. Is a Citizen: Reaffirmed by the Supreme Court in 2026
Under the Fourteenth Amendment, a child born in the United States acquires citizenship at birth regardless of the parents’ nationality or immigration status, with narrow exceptions such as children of foreign diplomats. A January 2025 executive order sought to deny birthright citizenship to children whose parents were neither citizens nor lawful permanent residents, but on June 30, 2026, the Supreme Court held the order unconstitutional in Trump v. Barbara, confirming the citizenship of U.S.-born children, including the children of expatriate employees. Because a child of Japanese parents also acquires Japanese nationality at birth, the child is a dual national from day one.
Three Lifelong Obligations of U.S. Citizens
The United States taxes on the basis of citizenship, so a citizen must report worldwide income no matter where he or she lives. A citizen child living in Japan generally has the following obligations:
| Obligation | What it involves (2026) | Main thresholds |
|---|---|---|
| Income tax return (Form 1040) | Report Japanese salary, part-time wages, and investment income. The foreign earned income exclusion ($132,900 for 2026) and the foreign tax credit usually reduce U.S. tax to zero, but the filing duty remains | Gross income at or above the standard deduction ($16,100 for a single filer); dependents with income above certain levels must also file |
| FBAR (FinCEN Form 114) | Electronic report of Japanese bank and brokerage accounts when the combined balance exceeds $10,000 at any time during the year | Aggregate balance over $10,000 |
| Form 8938 (FATCA reporting) | Attached to Form 1040 when specified foreign financial assets exceed the thresholds | Single filer living abroad: over $200,000 at year-end or over $300,000 at any time (double for joint filers) |
In addition, gifts or inheritances totaling more than $100,000 in a year from Japanese grandparents or other nonresident aliens must be reported on Form 3520. Most Japanese investment trusts are passive foreign investment companies (PFICs) under U.S. law; holding them in a NISA account does not make them tax-free for U.S. purposes, and Form 8621 reporting may be required.
What Accidental Americans in Japan Actually Encounter
- Bank and brokerage questionnaires: under FATCA, Japanese financial institutions ask whether a customer is a U.S. person and require Form W-9 from U.S. citizens. Once a U.S. birthplace is discovered, some institutions restrict services.
- Social Security number: a child born in the U.S. usually received an SSN at birth. If it has been lost, it can be reissued through the Federal Benefits Unit at the U.S. Embassy in Tokyo or the SSA. No filing is possible without it.
- Entering the United States: U.S. law requires citizens to enter on a U.S. passport, so a dual national cannot use ESTA with a Japanese passport.
- Japan’s nationality choice: under the Nationality Act, a person who became a dual national before age 18 must choose a nationality by age 20. Declaring a choice of Japanese nationality does not by itself terminate U.S. citizenship; U.S. obligations continue until a formal renunciation.
Catching Up on Missed Filings
A U.S. citizen living abroad whose failure to file was non-willful can use the Streamlined Foreign Offshore Procedures: file the last three years of income tax returns and six years of FBARs together with a certification of non-willfulness (Form 14653), and no penalties are imposed. Eligibility requires, among other things, that in at least one of the three years you had no U.S. abode and were physically outside the U.S. for at least 330 full days. It is sensible for parents to sort out the child’s situation before the child becomes an adult with his or her own filing duties.
The Option of Renouncing Citizenship
Someone who intends to live in Japan permanently may choose to renounce U.S. citizenship and end these obligations. Renunciation is done in person under oath at a U.S. embassy or consulate and generally requires the person to be at least 18. The fee, long fixed at $2,350, was reduced to $450 effective April 13, 2026. For tax purposes, the expatriate must file Form 8854 and certify compliance with U.S. tax obligations for the preceding five years.
- A covered expatriate subject to the exit tax under Section 877A is someone with a net worth of $2,000,000 or more, an average annual net income tax liability above $211,000 (2026) for the prior five years, or an inability to certify five years of compliance.
- An exception applies to a person who was a dual citizen of the U.S. and another country at birth, is taxed as a resident of that other country at expatriation, and was a U.S. resident for no more than 10 of the last 15 years; such a person is not a covered expatriate even if the net worth or tax liability tests are met, though the five-year compliance certification is still required.
- For former citizens who never filed, the Relief Procedures for Certain Former Citizens allow the process to be completed without paying tax or penalties, and without an SSN, if net worth is under $2,000,000 and total tax liability for the six relevant years is $25,000 or less, among other conditions.
Frequently Asked Questions
My child is in elementary school with no income. Do we need to do anything now?
No income means no return is due, but if accounts in the child’s name in Japan together exceed $10,000, an FBAR is required (a parent may file on behalf of a minor). Gifts from grandparents and mutual funds bought in the child’s name complicate future filings, so think carefully about how accounts are structured.
We never applied for an SSN with Form SS-5 when our child was born. What should we do?
Apply through the Federal Benefits Unit at the U.S. Embassy. You will need the birth certificate and a U.S. passport or consular report of birth. Without an SSN neither a return nor an FBAR can be filed, so start early.
What is the Trump Account for children born after 2024?
It is a children’s investment account created by the 2025 tax law. U.S. citizen children born from 2025 through 2028 who have an SSN receive a one-time $1,000 federal deposit if a parent makes the election. Contributions to the account are permitted from July 4, 2026, with an annual limit of $5,000. How the account is maintained after a move to Japan, and how Japan taxes it, will need to be confirmed as guidance develops.
This article is provided for general informational purposes only and does not constitute individual tax or legal advice. Please review current IRS rules, State Department procedures, and Japanese nationality law, and consult a qualified professional before acting.
Summary
A child born in the U.S. is a citizen at birth, as the Supreme Court confirmed in 2026, and the obligations of income tax filing, FBAR, and FATCA reporting continue for life after the family returns to Japan. Living in Japan brings its own issues: bank questionnaires, NISA and PFIC problems, and gifts from grandparents. Missed filings can be resolved through the Streamlined procedures, and the obligations can be ended by renunciation, now $450, after checking the exit tax rules. The most effective step parents can take is to understand the situation and organize accounts and options before the child reaches adulthood.
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- What Is the Exit Tax (Section 877A)? When Giving Up a Green Card or US Citizenship Triggers It
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