How Italian taxes work for US citizens moving to Italy or investing there: residency, IRPEF brackets, capital gains, US filing, FTC and treaty positioning.
Published: 2026-05-28 · Last verified: 2026-05-28 · 11 min
A US citizen who moves to Italy — or who invests in Italian assets while staying in the US — never escapes the US tax system. The US is one of two countries in the world (with Eritrea) that taxes citizens worldwide regardless of residency. Italy adds its own residency-based system on top.
The result is two parallel tax returns every year as long as US citizenship is held. The job of cross-border planning is to ensure income is not taxed twice — through the Italy–US Tax Treaty (1984) and the Foreign Tax Credit.
Under article 2 TUIR, you are Italian tax resident in a given calendar year if, for the greater part of the year (>183 days), any one of the following is true:
Note the or — a single factor triggers residency. Moving with the family and signing a lease for a year typically establishes both residenza and domicilio.
Italy taxes residents on worldwide income. Non-residents are taxed only on Italian-source income.
The 2026 IRPEF (national income tax) brackets:
Regional (1.23%–3.33%) and municipal (0%–0.9%) surcharges apply on top. Effective marginal rates therefore exceed 45% at the top bracket.
You still file Form 1040 every year. Key tools:
US-based retirement accounts (401(k), IRA, Roth) are not Italian-favored. Italian tax treatment of US retirement distributions is governed by Treaty article 18 and depends on the type of account — Italian advisors often misclassify Roth IRAs.
The Treaty:
It does not:
[LAST UPDATED: 2026]
Yes. The US taxes citizens on worldwide income regardless of residency. You file Form 1040 every year, using FEIE or Foreign Tax Credit to avoid double taxation, plus FBAR and possibly Form 8938.
When for more than 183 days in a calendar year you are either registered with the Anagrafe, OR have your domicilio (centre of interests) in Italy, OR have your habitual abode in Italy. Any single factor triggers residency.
Three IRPEF brackets: 23% up to €28,000; 35% from €28,001 to €50,000; 43% above €50,000. Regional and municipal surcharges apply on top, pushing the effective top marginal rate above 45%.
A €200,000 annual flat tax on all foreign-source income for high-net-worth individuals moving Italian residency, valid up to 15 years. It does not eliminate the US Form 1040 obligation for US citizens.
No — Italian tax treatment depends on Treaty article 18 and account type, and Roth IRA tax-free status is not automatically recognised. Distributions and growth should be reviewed case-by-case before establishing Italian residency.
Taxes in Italy for Americans: Practical Guide for US Citizens is handled from our Florida practice for Italian clients living in the United States and in Italy: office in St. Petersburg (Pinellas County, Tampa Bay), assistance across Florida — including Miami and South Florida — and remotely throughout Italy.
Physical office (by appointment): IIILEX International Consulting LLC, 7901 4th St N STE 300, St. Petersburg, FL 33702, US · +1 (786) 604-8763 · +39 335 344 9660 · us@3lex.us
Office hours: Monday to Friday, 09:00–18:00 (US Eastern Time). Italian clients are also served in the Italian morning window (CET). Working languages: Italian and English.
Consultations are held online (video call) or in person at the St. Petersburg office. Documents are exchanged securely by e-mail.
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IIILEX International Consulting LLC is the Florida-based practice of Avv. Dott. Massimo Leonardi — Italian-qualified Attorney (Avvocato), Dottore Commercialista and Statutory Auditor (Revisore Legale), qualified in Italy, with 30+ years of Italian practice. We work exclusively on cross-border matters between Italy and the United States, in coordination with licensed U.S. professionals for matters of U.S. law.
IIILEX International Consulting LLC · 7901 4th St N STE 300, St. Petersburg, FL 33702 · us@3lex.us · +1 (786) 604-8763 · +39 335 344 9660
Massimo Leonardi is admitted to practice law in Italy and is not admitted to practice law in Florida or elsewhere in the United States. He is qualified in Italy as Dottore Commercialista and Revisore Legale and is not a U.S. Certified Public Accountant. IIILEX International Consulting LLC provides cross-border consulting and Italian legal and tax advisory services. Matters requiring advice on U.S. or Florida law are handled in coordination with appropriately licensed U.S. professionals.