Form 706-NA: Estate tax return for nonresident aliens - complete guide

Written by  Mel Whitney, EA

Last updated Jun 12, 2026

Form 706-NA is the US federal estate tax return used to compute estate and generation-skipping transfer (GST) tax liability for a nonresident non-citizen (NRNC) decedent who owned US-situated assets at death.

The executor must file within 9 months of the date of death if the gross US estate, gift tax specific exemption, and adjusted taxable gifts together exceed $60,000 (Instructions for Form 706-NA, Rev. September 2025).

Unlike the standard 706 return filed for US citizens and domiciliaries on worldwide assets, Form 706-NA covers only US-situated property.

Form 706-NA key facts (2026 filing season, deaths in 2025)

• Who files: the executor of an NRNC decedent's estate.
• Filing threshold: gross US-situated assets plus the gift tax specific exemption and adjusted taxable gifts above $60,000 (IRC § 2102(b)(1)).
• Deadline: 9 months from the date of death; automatic 6-month extension on Form 4768.
• Unified credit for NRNCs: $13,000, which shelters the first $60,000 of taxable estate (IRC § 2102(b)(1)).
• Rate schedule: 18% to 40% under the Form 706 unified rate table, applied to the taxable estate.
• Death tax treaties: in force with 15 countries, including a Canada estate provision in the income tax treaty (Form 706-NA instructions, Rev. 9-2025).
• Post-filing release: the IRS issues a Transfer Certificate once the tax has been fully discharged or provided for. Complete packages generally take 12 to 18 months from receipt.

The form is governed by IRC §§ 2101–2108.

What is Form 706-NA

Form 706-NA is the US federal estate tax return for a nonresident, non-citizen decedent. The IRS imposes estate tax under IRC § 2101 on the transfer of US-situated assets held by an NRNC at death. The same form computes any generation-skipping transfer tax owed on US-situs transfers under chapter 13.

The structural difference between Form 706 and Form 706-NA comes down to scope, threshold, and credit, all of which favor US citizens dramatically.

For the citizen and green card holder side of the family, see our guide to Form 706 estate tax return for US citizens and expatriates.

Who must file Form 706-NA

The executor of an NRNC decedent's estate must file Form 706-NA when the date-of-death value of US-situated assets, the gift tax specific exemption, and post-1976 adjusted taxable gifts together exceed $60,000 (Instructions for Form 706-NA, Rev. September 2025). The threshold is a single combined number, not three separate tests.

Three conditions must all be met for Form 706-NA to be required:

1. The decedent was not a US citizen at the time of death.
2. The decedent was not domiciled in the US at the time of death. Domicile for estate tax means physical presence in a place combined with no definite present intent to leave (Treas. Reg. § 20.0-1), which is separate from the IRC § 7701(b) substantial presence test used for income tax.
3. The combined gross US-situs estate, gift tax specific exemption, and adjusted taxable gifts made after December 31, 1976 exceed $60,000.

A lifetime gift history can pull a small US estate into filing because the threshold adds the gift tax specific exemption and adjusted taxable gifts to the date-of-death value of US-situated assets. An estate of $45,000 in US securities can still require Form 706-NA if the decedent also made $20,000 of adjusted taxable gifts after December 31, 1976.

For the income tax counterpart and how domicile differs from residency, see our guide to the US tax rules for resident and nonresident aliens.

What qualifies as a nonresident non-citizen (NRNC)

An NRNC for estate tax purposes is a decedent who was neither a US citizen nor domiciled in the US on the date of death (Instructions for Form 706-NA, Rev. September 2025). Domicile is a facts-and-circumstances test based on presence plus intent to remain, not the income tax day-count rule.

A person can be a US tax resident for income tax purposes and still be an NRNC for estate tax purposes. The Form 706-NA instructions state this directly. The two regimes use different tests, so the outcomes can diverge.

Two clarifications that catch people out:

• US citizens living abroad are not NRNCs. Their executors file Form 706, not Form 706-NA, on the worldwide estate.
• A decedent who acquired US citizenship solely by reason of being a citizen of a US territory, or by birth or residence within a US territory, is not treated as a US citizen for Form 706-NA purposes (Instructions for Form 706-NA, Rev. September 2025).

TFX client scenario

A German citizen lived in Manhattan for nine years on an L-1 visa, met the substantial presence test every year, and died in 2025 owning a $1,200,000 US brokerage account and a $400,000 condo in Munich. Because he owned $1,200,000 of US corporate stock in a US brokerage account, the executor files Form 706-NA on those US-situs securities. The Munich condo is not part of the US gross estate, but its value is reported for deduction-proration purposes.

US-situs assets – what is included in the gross estate

Form 706-NA taxes US-situs assets only. The executor lists US-situated assets on Part V of the form and reports the value of assets located outside the United States on Part IV, line 2, so the IRS can prorate the deductions correctly (Instructions for Form 706-NA, Rev. September 2025).

The IRS applies situs rules to each asset category as follows:

Two carve-outs surprise most executors:

1. Works of art owned by the NRNC are excluded from US-situs if, on the date of death, they are imported solely for public exhibition, on loan to a US nonprofit public gallery or museum, and on exhibition or en route to or from exhibition (Instructions for Form 706-NA, Rev. September 2025).
2. Deposits with US banks, US banking branches of foreign corporations, and US savings and loan associations are treated as located outside the United States if they are not effectively connected with a US trade or business (IRC § 2105(b)).

NOTE! Stock in a US corporation is US-situs even when the share certificates are held abroad.

Filing deadline and extensions

Form 706-NA is due 9 months after the decedent's date of death (Instructions for Form 706-NA, Rev. September 2025). An executor who cannot file in time can request an automatic 6-month extension on Form 4768, checking the Form 706-NA box in Part II of Form 4768 on or before the original due date.

A second extension is possible only if the executor is out of the country and has already received the first 6-month extension. The second request requires a separate Form 4768 with a written explanation, and the IRS is not obligated to grant it (Instructions for Form 706-NA, Rev. September 2025).

The extension extends time to file, not time to pay. Interest accrues on unpaid estate tax from the original due date even when Form 4768 is timely submitted, so executors who expect a balance should pay an estimated amount with the extension.

Form 706-NA is filed by mail at:

• US Postal Service: Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999.
• Private delivery service (FedEx, UPS, DHL): Internal Revenue Submission Processing Center, 333 W. Pershing, Kansas City, MO 64108.

For the decedent's final income tax return, which is a separate filing from the estate return, see our guide to filing a final tax return for a deceased US taxpayer.

Computing the estate tax on Form 706-NA

The form is completed in the IRS-recommended order – Part I, then Part III, then Part V, Part IV, and finally Part II – and the tax computation in Part II runs in four steps (Instructions for Form 706-NA, Rev. September 2025). The math sits in Part II and follows the Form 706 unified rate schedule with one critical change: the unified credit is fixed at $13,000.

The Part II tax computation, in plain terms:

1. Determine the taxable estate on Part IV (US gross estate minus prorated deductions and any treaty allowance).
2. Add adjusted taxable gifts made by the decedent after December 31, 1976 to arrive at the tentative tax base.
3. Calculate tentative tax on that base using Table A, the unified rate schedule, from the Instructions for Form 706 that match the year of death.
4. Subtract the tentative tax on the gifts alone, then subtract the $13,000 unified credit (IRC § 2102(b)(1)), the credit for pre-1977 federal gift taxes, any Canadian marital credit, and any prior transfer credit, to arrive at the net estate tax due on line 17.

Calculation example. An NRNC decedent who died in 2025 held US real estate of $500,000 and stock in a US corporation of $200,000. The decedent's worldwide gross estate was $1,400,000. Allowable deductions worldwide totaled $100,000.

• Gross US-situs estate (Part V): $700,000.
• Deduction proration: $700,000 ÷ $1,400,000 × $100,000 = $50,000.
• Taxable estate (Part IV): $700,000 − $50,000 = $650,000.
• Tentative tax under the 2025 unified rate schedule (40% top rate, with the bracket structure that begins at 18%): $211,300, computed as $155,800 on the first $500,000 plus 37% of the next $150,000.
• Less unified credit: $13,000.
• Net estate tax due: $198,300.

Instructions for Form 706-NA (Rev. September 2025, PDF) include a cross-reference to the Form 706 rate schedule and a line-by-line walkthrough of Part II.

Allowable deductions

NRNC estates deduct funeral expenses, administration expenses, claims against the estate, unpaid mortgages and liens, and casualty losses, but only in proportion to the share of the worldwide estate that sits in the US (Instructions for Form 706-NA, Rev. September 2025). The proration formula is:

(US gross estate ÷ worldwide gross estate) × total allowable deductions = the amount the estate can deduct on Part IV, line 4.

Two deductions trigger most of the questions executors raise:

• Charitable deduction. Available only for transfers to a domestic entity or for use in the United States, unless a treaty provides otherwise (IRC § 2106(a)(2)). Schedule O from Form 706 must be attached.
• Marital deduction. Not available when the surviving spouse is not a US citizen, unless the property passes to a qualified domestic trust (QDOT) under IRC § 2056A with an election on Schedule M from Form 706. The QDOT defers, rather than eliminates, the tax: estate tax applies as principal is distributed to the surviving spouse or when the surviving spouse dies, on Form 706-QDT.

Death tax treaties and Form 706-NA

The US has death tax (estate and gift) treaties in force with 15 countries as of 2026: Australia, Austria, Canada (through Article XXIX B of the income tax treaty), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, South Africa, Switzerland, and the United Kingdom (Instructions for Form 706-NA, Rev. September 2025).

A treaty position is disclosed under Treas. Reg. § 301.6114-1 by attaching a statement to the return.

A death tax treaty can do three things on Form 706-NA: reallocate situs of certain assets, increase the unified credit available to the NRNC estate, or cap the US estate tax at the amount that would have been due if the decedent had been a US domiciliary.

The instructions specifically note that the treaties with Australia, Canada, Finland, France, Germany, Greece, Italy, Japan, and Switzerland contain provisions that raise the unified credit above $13,000 under IRC § 2102(b)(3)(A).

To claim treaty relief on Form 706-NA, attach a statement identifying the treaty and article relied on, plus any required computation or supporting schedules.

The full IRS list of US estate and gift tax treaties shows the countries with estate and/or gift tax treaty coverage.

For the two treaties most often invoked by TFX clients, see our guides to the UK-US estate and inheritance tax treaty and the US-Japan tax treaty estate provisions.

After filing – IRS Transfer Certificate (Form 5173)

The IRS issues a Transfer Certificate (Form 5173) once any US estate tax owed by the NRNC estate has been fully discharged or provided for, and it permits the property to be transferred. Property administered within the United States does not require a Transfer Certificate.

Track 1: Form 706-NA was required (the combined $60,000 threshold was exceeded).

The procedure has four steps:

1. File Form 706-NA within 9 months of death and pay any estate tax due.
2. Confirm the IRS has accepted the return. The executor can request an Estate Tax Closing Letter on Pay.gov for a $56 user fee, reduced from $67 for requests received on or after May 21, 2025 (Instructions for Form 706-NA, Rev. September 2025; TD 10031). The IRS also accepts a free account transcript with transaction code 421 as the functional equivalent (IRS Notice 2017-12). The full ETCL procedure is covered in the estate tax closing letter FAQ.
3. Fax both pages of the filed Form 706-NA and all Schedule A continuation sheets to 855-201-8011 if the executor is in the United States, or to 304-707-9970 if outside the United States.
4. Wait. The IRS processes complete packages in 12 to 18 months from the date all documentation is received.

Track 2: Form 706-NA was not required (the combined $60,000 threshold was not exceeded).

The executor does not file Form 706-NA. Filing one unnecessarily delays the Transfer Certificate. Instead, the executor faxes the following directly to the same numbers:

• Copies of the decedent's last will and any codicils, with English translations where applicable.
• One copy of each non-US death or inheritance tax return filed.
• One copy of the death certificate.
• An affidavit signed by the executor before a notary, listing the decedent's date and country of birth, naturalization status, citizenship and residence at death, all US assets held at death with values, and whether any US bank accounts were used in a US trade or business.

NOTE! The 12 to 18 month processing window starts when the IRS receives the complete documentation package, not when Form 706-NA is filed. Executors who plan estate administration should treat the Transfer Certificate as a one-to-two-year line item, not a back-office formality.

For the heir-side reporting that follows once US assets are released, see our guide to foreign inheritance reporting on Form 3520.

Penalties for non-compliance

Form 706-NA non-compliance carries penalties under IRC § 6651 and IRC § 6662. The first two penalties run concurrently and can together reach 47.5% of unpaid estate tax (Instructions for Form 706-NA, Rev. September 2025).

The three penalties that apply to Form 706-NA filings:

1. Failure to file (IRC § 6651(a)(1)): 5% of unpaid tax per month, capped at 25%, when Form 706-NA is not filed by the due date or extended due date.
2. Failure to pay (IRC § 6651(a)(2)): 0.5% of unpaid tax per month, capped at 25%, running from the original due date regardless of any filing extension.
3. Valuation understatement (IRC § 6662): a 20% addition to tax applies to underpayments due to a substantial valuation understatement, defined as reported value at 65% or less of correct value; the penalty rises to 40% for a gross valuation understatement, defined as reported value at 40% or less of correct value. No penalty applies if the underpayment attributable to the understatement does not exceed $5,000.

Reasonable cause is available, but the timing matters. The Form 706-NA instructions are explicit: a reasonable-cause explanation submitted with the return is not considered. The executor must wait for the IRS penalty notice, then respond with the explanation.

Bottom line

Form 706-NA: what to remember for the 2026 filing season

• The form applies to NRNC decedents whose US-situated assets, plus the gift tax specific exemption and adjusted taxable gifts, exceed $60,000.
• The unified credit is $13,000, sheltering only the first $60,000 of taxable estate, against a $15,000,000 basic exclusion for US citizens dying in 2026.
• 15 countries have death tax treaty coverage with the US. Estate-tax treaty relief comes from the IRS estate and gift tax treaty list; Canada's estate tax provisions are in Article XXIX B of the US-Canada income tax treaty.
• The IRS issues a Transfer Certificate once the estate tax, if any, has been fully discharged or provided for, and it can be used to transfer the property.
• The IRS takes 12 to 18 months to issue a Transfer Certificate after receiving a complete package.

Two pressure points define most NRNC estates:

• The 9-month filing deadline for Form 706-NA.
• The 12-to-18-month wait for the Transfer Certificate.

Together, they can keep US assets inaccessible to heirs for nearly two years from the date of death, even when the tax is paid on time. Executors should gather the required documents early, so the transfer-certificate request can be submitted without avoidable delay.

Once the assets are released, heirs who later sell inherited US property should review our guide on how to avoid capital gains tax on inherited property for the basis step-up rules.

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