Portugal’s constitutional court has (partially) struck down several provisions of a controversial new law that would significantly overhaul the ability of expats to claim citizenship. However, key parts of the legislation could still become law.

Right now, golden visa holders can apply for full citizenship after just five years. Most other European nations impose a minimum wait of ten years, which has made Portugal a popular option for Americans seeking a second passport.

Under a law passed by Portugal’s parliament, the waiting period will double from five years to ten years, among other restrictions.

The Constitutional Court found several provisions unconstitutional, including automatic denial of citizenship for people convicted of crimes with sentences of two years or more.

Importantly for expats, the court also vacated rules that would have eliminated time accrued during application waiting periods as counting toward residence periods.

The proposed legislation now returns to Portugal’s parliament for revision. Crucially, the court left the new 10-year timeline untouched. However, it is expected that the legislation will face additional legal challenges, so we will keep you updated on any future developments.

Tax season is nearly upon us, which means it’s time to think about what you owe Uncle Sam (cue collective groan).

Fortunately, a few key deductions and exclusions for expats have gone up, which means more money in your pocket.

Several inflation-driven adjustments will directly affect Americans living abroad.

The most notable is the increase to the Foreign Earned Income Exclusion (FEIE), which has been set at $130,000, up $3,500 from the prior year. This adjustment gives qualifying expats the ability to shield foreign-earned income from U.S. federal income tax. To qualify, you must meet either the Physical Presence Test or the Bona Fide Residence Test.

The increase to the FEIE also affects the foreign housing exclusion, which allows expats to exclude certain housing costs above a minimum threshold. For the 2025 tax year, the base housing amount is set at 16% of the FEIE, or $20,800. Only housing expenses above this amount are eligible for exclusion.

The general cap on qualifying housing expenses is 30% of the FEIE, which translates to $39,000. However, expats living in designated high-cost cities may qualify for higher limits. The IRS publishes updated city-specific caps each year.

The increased standard deduction for 2025 is a meaningful change. The deduction rises to $15,750 for single filers, $23,625 for heads of household, and $31,500 for married couples filing jointly. This increase reduces taxable income before foreign tax credits are applied, which is especially helpful for expats living in higher-tax countries.

Another major change is the increase to the State and Local Tax (SALT) deduction cap, which rises from $10,000 to $40,000. This matters most for expats who still maintain tax ties to a U.S. state. Expats should consider moving their domicile to Florida or another low-tax state.

Expats with children should pay close attention to the child tax credit rules. To claim the refundable portion, at least one parent on a joint return and the qualifying child must have valid U.S. Social Security Numbers. For families with dual-citizen children who lack SSNs, this is an important planning consideration moving forward.

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