We want to get married — but U.S. citizenship makes that impossibly risky

“Because of my US citizenship, everything is complicated ... we don’t know if we should get legally married … because it would lead to punitive taxation not just for myself, but for him and our growing family.“

— Rita, an American who now lives in New Zealand

Dear Congress,

I am an American living in New Zealand and want to get married. But U.S. citizenship makes that impossibly risky.

I was born American into my loving family, who still reside in Illinois. In 2010, I moved to Canada to pursue higher education opportunities that were not available in the U.S. In August. 2016, following the completion of my MA and PhD, I moved from Canada to New Zealand. This move was, again, due to lack of opportunities in the U.S., as I could not find employment that suited my education and expertise in the U.S., but that opportunity did arise here in New Zealand.

Since moving to New Zealand, I have met and fallen in love with a fellow New Zealander. We have a home together and wish to start a family. However, because of my U.S. citizenship, everything is complicated. For example, we don’t know if we should get legally married (NZ recognises de facto while the U.S. does not) because it would lead to punitive taxation not just for myself, but for him and our growing family. The existing world-wide taxation makes it difficult to share finances because it would hamstring our ability to provide for our family. Because the U.S. makes it so hard for citizens to navigate taxes while permanently residing abroad, it leaves us in limbo.

Furthermore, the resources I have available to save for our future in retirement are heavily burdened by the existing world-wide double taxation rules. My employer only offers New Zealand-based schemes that will trigger punitive foreign trust rules. To be able to save enough to reasonably retire, I have to pay more than Americans living in the U.S. I am also restricted from investing in a commensurate retirement savings programs in the U.S. due to residency limits on opening those accounts and to the tax I would pay on those distributions while residing here in New Zealand.

I am caught between a rock and a hard place, through no fault of my own. I have seriously considered renouncing my citizenship because of this limbo. However, that would mean I have to cut myself off from my family who remain in the U.S., because I would lose my ability to come and care for them if they were to become ill and need my support. For all of its faults, my heart still loves the U.S., it will always be home. But now that I have another home and a growing family here in New Zealand, it seems like the U.S. is trying to force me to make an impossible decision.

All of this would immediately be resolved if I could file as a nonresident alien for tax purposes, as proposed by Representative LaHood's Residence-Based Taxation for Americans Abroad Act (H.R. 10468).

Sincerely,

Rita
From New Zealand