Visa holders · From Nepal
Quitting your job releases your whole EPF balance, so you can take it before moving to the US from Nepal. Taxes on a payout made before your US residency starts generally stop at Nepal’s final 5% on part of it.
Nepal’s Employees Provident Fund adds interest and pays the whole balance in one lump sum, whatever your reason for leaving the job. The Citizen Investment Trust’s retirement scheme pays out in full once a resignation is accepted. Nepal subtracts half the payout or Rs 5 lakh, whichever is higher, and withholds 5% of the rest as a final tax. Paid after your US residency starting date, the same payout may be taxable in the US almost in full.
Updated · Sources
Nepal’s rules for income year 2083/84
- 183 days
- in Nepal within any 365-day period make you a Nepali tax resident for the income year.
- 6%
- of the interest on a Nepali savings or fixed deposit is withheld from individuals as a final tax.
- 7.5%
- of the gain on land or a house you owned 5 years or more is Nepal’s final tax when you sell. Under 5 years, it is 10%.
Income year 2083/84 runs from mid-July 2026 to mid-July 2027. A bank may withhold more from interest once it treats you as non-resident. Nepal exempts some property sales, such as a home you owned and lived in for 10 years, or one sold under Rs 10 lakh.
Will Nepal still count you as resident in the income year you leave?
Nepal decides residence one income year at a time, from Shrawan 1 to the last day of Ashadh. Meeting any one of the first three tests makes you resident for that whole year.
Your normal abode is still in Nepal
A normal abode (your usual home) in Nepal makes you resident, but the Income Tax Act never says what counts as one. Ask your adviser in Nepal whether a home or family you leave behind keeps you resident.
You were in Nepal 183 days out of 365
The 183-day test looks at any 365 days in a row, since the Act does not tie that window to the income year. A move early in an income year may therefore still leave you resident for it.
The Government of Nepal posted you abroad
Anyone the Government of Nepal posts to a foreign country at any time in the income year is resident for that year.
You hold shares when your residence ends
Nepal’s Income Tax Act taxes the gain on your shares and other securities as you leave. It treats them as sold at market value just before you become non-resident. Land and buildings in Nepal are left out, and so is your interest in a retirement fund. The US still uses what you first paid as your basis when you later sell.
You leave Nepal for an indefinite period
If you leave for an indefinite period, the Inland Revenue Department can require an early return by written notice. That return may cover the whole income year or part of it. It can fall due before the usual date, which is three months after the year ends.
Once you are non-resident, Nepal taxes only income with its source in Nepal. While you stay resident, it can also tax your US pay, with a credit for the US tax up to Nepal’s average rate.
Nepal’s tax on a Rs 20 lakh EPF payout is Rs 50,000, and the US tax turns on when you take it.
Nepal lets you deduct what you pay into the EPF, within limits, and does not tax the fund’s income. Because no country taxed that money, IRC 72(w) leaves you little or no US basis, the untaxed part of a later payout. If you leave an EPF balance unclaimed for 6 years after it becomes payable, it moves to an account that earns no interest.
Part of the payout Nepal taxes
Rs 10 lakh
Nepal first subtracts half the payout, because half is more than Rs 5 lakh.
Nepal’s final tax on that part
Rs 50,000
The fund takes this before paying you, and it settles Nepal’s tax on the payout.
Added to US income if paid after your residency starting date
Rs 20 lakh
At most the whole payout, about $13,205 in this example. Nepal’s Rs 50,000 may then count toward a US foreign tax credit.
Added to US income if paid before your starting date
Rs 0
A payout while you are still a nonresident alien is generally foreign income outside US tax.
Section 65 of Nepal’s Income Tax Act taxes a lump sum from an approved retirement fund as a gain, after the first row’s subtraction. Here the gain is Rs 10 lakh, and 5% of Rs 10 lakh is Rs 50,000. CIT’s retirement scheme follows the same rule. The dollar figure is an illustration at Treasury’s reporting rate of 151.46 rupees per dollar for June 30, 2026.
Because there is no US-Nepal tax treaty, Nepal and the US each tax your Nepali income by their own rules.
Nepal’s rules here are for years it treats you as non-resident, and the US rules apply from your residency starting date.
| Nepal | US | |
|---|---|---|
| Interest on a savings or fixed deposit | Final tax withheld At the rate set for individuals | Taxed With a credit for the Nepali tax you owe |
| Payouts from a Nepali mutual fund | 5% withheld A final tax | PFIC rules Ordinary income rates |
| Gain on land or a house in Nepal | Final tax at registration The rate depends on how long you owned it, and some sales are exempt | Taxed in dollars A main home may qualify for the US exclusion |
| Rent from a house you let | No income tax The municipality charges its own rent tax | Taxed Generally depreciated over 30 years |
| Gifts and inheritances from family | Exempt Unless tied to a business, a job or an investment | Not income Large gifts go on Form 3520 |
The US credits the Nepali tax you finally owe on income from Nepal, within the Form 1116 limit. Tax that Nepal would refund to you is not a tax paid, so it earns no credit.
Which parts of a move from Nepal trip people up later?
Holding Nepali mutual funds or CIT units
Under US rules, a Nepali mutual fund or CIT unit scheme is usually a PFIC (passive foreign investment company). A fund like that generally needs its own Form 8621 every year. If you sell without a PFIC election, the gain from your earlier US-resident years is taxed at the top US rate, plus interest.
Omitting your EPF and CIT from your US forms
Report your EPF and CIT accounts on Form 8938 once your foreign assets pass its thresholds. The form generally treats each as a foreign pension plan, valued at your share at year end. No FBAR exemption covers them, so list both accounts there as well. The IRS has not said how it classifies the EPF, CIT or SSF. That leaves open whether the US taxes their yearly growth, or expects Form 3520 for them.
Counting on an SSF refund as you leave
A Nepali citizen who moves abroad generally cannot take Social Security Fund pension savings early, unless they give up Nepali citizenship for another. The Fund’s retirement-benefit savings, by contrast, are paid in a lump sum when your job ends.
Staying on an F-1 into a sixth calendar year
F-1 days generally stop being exempt after five calendar years, and OPT years and part years both count toward the five. In year six you are usually a resident alien from your first day here that year, so Nepali interest and withdrawals become US-taxable. Social Security and Medicare are then generally withheld from your pay, though on-campus work for your own school can stay exempt.
Converting rupees at the wrong rate
The IRS has no yearly average rate for the Nepali rupee. Income is generally converted at the rate on the day you receive it. The FBAR and Form 8938 generally use Treasury’s rate for the last day of the year. At Treasury’s December 31, 2025 rate of 143.79, the FBAR’s $10,000 threshold was Rs 1,437,900. A 2025 FBAR was due once your accounts’ highest balances together passed it.
We show when to take your EPF payout, and file the US forms your Nepali savings need.
When you move from Nepal, we prepare the US return that reports your EPF, CIT, rupee deposits and funds. A licensed US CPA signs every return we file.
- Your first US return is usually dual-status (nonresident for part of the year, resident for the rest). We prepare it and each federal and state return after it. Your Nepali accountant files with Nepal’s Inland Revenue Department, and we work from the same figures.
- We weigh the US tax on an EPF or CIT payout before your residency starting date against the tax on one after. We do the same for selling Nepali funds or land.
- We prepare an FBAR that lists every Nepali bank, fund, EPF and CIT account, plus Form 8938 when your foreign assets exceed its thresholds. We also prepare each Nepali fund’s yearly Form 8621, and Form 5471 for a Nepali company where one is due. The instant quote prices each account, each fund and each company you own over 20% of.
- We use Form 1116 so the Nepali tax on your interest, EPF payout or land sale cuts your US tax, within its limit. We also work out quarterly estimated payments, since no one withholds US tax from income paid in Nepal.
- We report gifts from family in Nepal on Form 3520 once one giver, counted with their relatives, passes $100,000 in a year.
- We answer IRS or state notices about returns we prepared, such as a letter on your EPF payout, within the fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
What happens to your rupees once the US counts you as resident?
Does Nepal have a tax treaty with the USA?
No. The IRS treaty list, last reviewed January 3, 2026, has no Nepal entry. Relief from double tax therefore comes from credits: the US foreign tax credit and Nepal’s own adjustment for foreign tax. No treaty rate caps what Nepal withholds from your interest, payouts and gains. If both countries count you as resident in the same year, both can tax your worldwide income. The two countries have no Social Security agreement either.
How much dollar can I carry from Nepal to the USA?
The US sets no limit on how much money you can carry in from Nepal. Cash and monetary instruments over $10,000 must be reported when you enter, on FinCEN Form 105. That $10,000 is the total you and your family carry together. Money moved by bank transfer is not covered by this rule. Nepal Rastra Bank’s published notice names no limit for dollars leaving Nepal, so ask your bank before you travel.
Is my Nepal bank interest taxable in the US?
Yes, interest from a Nepali bank account is taxable in the US from your US residency starting date, whatever Nepal withholds. Nepal’s law sets a final 6% on deposit interest paid to individuals, and the US credits the Nepali tax you actually owe. A multi-year fixed deposit that pays at maturity may be taxed in the US each year as the interest builds up. Interest credited before your starting date, including in an F-1 student’s exempt years, stays outside US tax. When you later turn a deposit’s rupees into dollars, any exchange gain or loss can count as ordinary income or loss under IRC 988.
What happens to my EPF and CIT savings in Nepal when I move to the US?
You can usually withdraw your EPF and CIT savings once you leave your job, but moving abroad while still employed does not release them. Nepal withholds a final 5% on the part above half the payout or Rs 5 lakh, whichever is higher. Taken before your US residency starting date, the money is generally outside US tax; taken after, the US may tax nearly all of it. As a US resident, you generally report the accounts on Form 8938 above its thresholds and also on the FBAR. Social Security Fund money is different: a Nepali citizen can generally take its pension part early only after giving up Nepali citizenship for another.
Sources
- Income Tax Act 2058 (2002), consolidated with the Finance Act 2082 amendments (Inland Revenue Department, Nepali text)
- Income Tax Act 2002 (2058), English translation amended to 2021 (Inland Revenue Department)
- Inland Revenue Department, booklet on the Finance Act 2083 (Nepali)
- Inland Revenue Department, treaties and agreements
- Employees Provident Fund Act 2019 (1962), as amended to 2082 (Employees Provident Fund)
- Citizen Investment Trust, Employees Saving Growth Retirement Scheme procedure, 2080 (second amendment, 2082)
- Citizen Investment Trust, frequently asked questions
- Citizen Investment Trust, Citizen Unit Scheme
- Social Security Fund, Social Security Scheme Operation Procedure, 2075 (fifth amendment)
- Local Government Operation Act 2074 (Nepal), section 57 (rent tax)
- Nepal Rastra Bank, notice on carrying foreign currency (2083/04/07)
- IRS, United States income tax treaties, A to Z
- US Department of State, Treaties in Force (2025)
- Social Security Administration, totalization agreements overview
- IRS, Publication 519 (2025), U.S. Tax Guide for Aliens
- IRS, Publication 550 (2025), Investment Income and Expenses
- 26 U.S.C. § 72, Annuities; certain proceeds of endowment and life insurance contracts
- 26 U.S.C. § 102, Gifts and inheritances
- 26 U.S.C. § 121, Exclusion of gain from sale of principal residence
- 26 U.S.C. § 168, Accelerated cost recovery system (alternative depreciation for property used abroad)
- 26 U.S.C. § 901, Taxes of foreign countries and of possessions of United States
- 26 U.S.C. § 904, Limitation on credit
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
- 26 U.S.C. § 988, Treatment of certain foreign currency transactions
- 26 U.S.C. § 1012, Basis of property: cost
- 26 U.S.C. § 1291, Interest on tax deferral
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- 26 C.F.R. § 301.7701-4, Trusts
- 26 U.S.C. § 3121, Definitions (employment for FICA)
- 26 U.S.C. § 7701, Definitions (resident alien and nonresident alien)
- 31 C.F.R. § 1010.340, Reports of transportation of currency or monetary instruments
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- US Customs and Border Protection, Money and other monetary instruments
- FinCEN, FBAR line item filing instructions
- IRS, Instructions for Form 8938 (Rev. November 2021)
- IRS, Instructions for Form 3520 (Rev. December 2025)
- IRS, Instructions for Form 1116
- US Treasury, Fiscal Data, Treasury Reporting Rates of Exchange
- IRS, Yearly average currency exchange rates
Reviewed and updated October 2026. General information, not advice for your situation.