Dealing with U.S. estate taxes can feel overwhelming, especially when the deceased person wasn't a U.S. citizen or resident. Form 706-NA is the specialized tax return used in these situations. This guide breaks down everything you need to know in straightforward terms, using official information from the IRS.

What the Form Is For

Form 706-NA—officially titled “United States Estate (and Generation-Skipping Transfer) Tax Return Estate of nonresident not a citizen of the United States”—is the tax form used to calculate and report estate taxes when someone who was neither a U.S. citizen nor a U.S. resident dies owning property located in the United States.

Think of it this way: If your relative from another country owned a vacation home in Florida, stocks in American companies, or had money in a U.S. bank account connected to a business here, the IRS wants to know about it. The form calculates whether any federal estate tax is owed on those U.S.-based assets. It also addresses Generation-Skipping Transfer (GST) taxes—a special tax that applies when wealth passes down to grandchildren or others more than one generation below the deceased person.

The key distinction: This form is only for nonresident aliens (people who weren't living in or citizens of the U.S.). U.S. citizens and residents use the regular Form 706 instead. (Source: IRS.gov)

When You’d Use It (Late/Amended Returns)

Standard Filing

You must file Form 706-NA within 9 months of the person's date of death. For someone who died in 2021, this deadline is firm unless you request an extension.

Extensions

If you can't meet the 9-month deadline, you can request an automatic 6-month extension using Form 4768. This gives you extra time to file the paperwork, but any tax owed is still due by the original 9-month deadline—interest will accrue on late payments.
If you're an executor living outside the U.S., you may apply for an additional extension beyond the initial 6 months by filing a second Form 4768 with a written explanation.

Late Returns

If you miss the deadline without an approved extension, you'll face penalties for both late filing and late payment unless you can demonstrate “reasonable cause.” The IRS won't consider explanations attached to your original return; you'll need to respond separately if you receive a penalty notice.

Amended Returns

If you discover errors after filing, you must file another complete Form 706-NA. Write “Supplemental Information” across the top of page 1 and attach copies of pages 1–4 from your original return. This alerts the IRS that you're correcting or adding information. (Source: IRS.gov)

Key Rules for 2021

Understanding when Form 706-NA is required hinges on a few critical 2021 thresholds and rules.

Filing Threshold

You must file if the total value of U.S.-situated assets at death, plus certain lifetime gifts, exceeds $60,000. This is dramatically lower than the multi-million-dollar exemption available to U.S. citizens and residents.
For 2021, U.S. citizens had an $11.7 million exemption; nonresident aliens get only $60,000.

What Counts as “U.S.-Situated” Assets

• Real estate physically located in the U.S.
• Tangible personal property (cars, jewelry, artwork) located in the U.S.
• Stock in U.S. corporations (even if the stock certificates are held abroad)
• Certain debt obligations of U.S. persons, corporations, or government entities

What’s Excluded

• Bank deposits not connected to a U.S. business
• Life insurance proceeds
• “Portfolio debt” obligations (certain bonds and notes)
• Stock in foreign corporations

Unified Credit

Nonresident aliens receive a unified credit of $13,000 (equivalent to exempting $60,000 in assets from tax). This is the baseline, though tax treaties with certain countries may provide additional relief.

No Portability

Unlike U.S. citizen spouses who can transfer unused estate tax exemptions to each other, nonresident alien estates cannot elect “portability” to benefit a surviving spouse.

Tax Treaties

The U.S. has estate tax treaties with 15 countries (including Canada, UK, Germany, France, Japan, and others). These treaties often provide more generous exemptions or credits. If you're claiming treaty benefits, you must attach Form 8833 and supporting documentation. (Source: IRS.gov)

Step-by-Step Filing Process (High Level)

Filing Form 706-NA isn't a quick task. Here's the roadmap:

Step 1: Gather Essential Documents

• Certified copy of the death certificate
• Certified copy of the will (with English translation if needed)
• Death tax returns filed in other countries
• Appraisals and valuations of all U.S. property
• Balance sheets for any closely-held business interests
• Copies of any U.S. gift tax returns the deceased filed

Step 2: Determine What’s Included

Review all assets to identify which are “U.S.-situated.” Remember: it’s not where the person lived, but where the property is located. Stocks of U.S. companies count even if held through a foreign broker.

Step 3: Value Everything

Property must be valued as of the date of death using “fair market value”—what a willing buyer would pay a willing seller, neither under pressure. You may elect alternate valuation (6 months after death) only if it reduces both the estate value and the tax owed.

Step 4: Complete the Form in Order

• Part I: Basic information (decedent’s name, SSN/ITIN, executor details)
• Part III: General information questions (including questions about U.S. citizenship history)
• Schedule A: List all U.S.-situated assets with values
• Schedule B: Calculate deductions and taxable estate
• Part II: Compute the tax using Table A—Unified Rate Schedule from Form 706 instructions

Step 5: Attach Required Schedules

You’ll need schedules from regular Form 706 if claiming certain deductions (marital, charitable, etc.). Don’t forget Form 8971 for consistent basis reporting to beneficiaries.

Step 6: File and Pay

Mail to: Internal Revenue Service Center, Kansas City, MO 64999.
Make checks payable to “United States Treasury.” The IRS cannot accept single checks for $100 million or more—split into multiple payments if necessary. (Source: IRS.gov)

Common Mistakes and How to Avoid Them

Mistake #1: Assuming No Filing is Required

If U.S. assets exceed $60,000 (including adjusted taxable gifts), you must file even if no tax is owed.

Mistake #2: Missing Assets

Forgetting that U.S. corporate stock counts as U.S. property, regardless of where certificates are held.

Mistake #3: Incomplete Documentation

Failing to attach required supporting documents delays processing. Translations are mandatory for non-English documents.

Mistake #4: Incorrect Valuation Date

Using outdated values instead of fair market value as of the date of death (or properly elected alternate valuation date).

Mistake #5: Ignoring Treaty Benefits

Many countries have estate tax treaties with the U.S. Always check for eligibility and attach Form 8833.

Mistake #6: Paying Wrong Amount

Miscalculating the unified credit or tax rate. Double-check computations or hire a professional.

Mistake #7: Filing Form 706-NA When Not Needed

If you only need a transfer certificate and not a full return, file an affidavit instead. (Source: IRS.gov)

What Happens After You File

Processing Time

The IRS typically takes 8–9 months to process Form 706-NA.

No Automatic Closing Letter

You must now request estate tax closing letters; they’re not automatic. Wait at least 9 months before requesting.

Alternative: Account Transcript

An “account transcript” can confirm that the IRS accepted your return. Request it through TDS or via Form 4506-T.

Audits

The IRS has three years from filing to audit the return. You can authorize representation via Form 2848.

Transfer Certificates

If the estate needs to transfer U.S. property, financial institutions may require a transfer certificate.
Fax a copy of Form 706-NA to the IRS at:

• U.S.: 855-201-8011
• International: 304-707-9970
  Processing typically takes 6–9 months.

Refunds

Overpayments generate refunds with interest from the original due date. (Source: IRS.gov)

FAQs

Q1: Do I need to file if the estate is worth less than $60,000?

Generally, no—unless transferring property or a financial institution requests a transfer certificate.

Q2: What if the deceased person once lived in the U.S. but moved away?

Use Form 706-NA if they were not domiciled in the U.S. and weren’t a citizen at death. (See IRS.gov)

Q3: Can I deduct funeral expenses and debts?

Yes, but deductions are generally proportional to the ratio of U.S. assets to worldwide assets.

Q4: What about the marital or charitable deduction?

Charitable deductions apply only to U.S. entities (unless a treaty allows otherwise).
Marital deductions require either a U.S. citizen spouse or a Qualified Domestic Trust (QDOT).

Q5: What happens if I discover I filed incorrectly?

File a supplemental Form 706-NA immediately, marked “Supplemental Information,” and attach copies of the original return.

Q6: Does my country's estate tax treaty help?

Possibly. Treaties with 15 countries may increase exemptions or credits. Attach Form 8833 with an explanation.

Q7: What if I sell inherited U.S. real estate?

Capital gains may apply. The buyer typically withholds 15% of the sale price using Form 8288.
The estate reports the sale on Form 1040-NR and claims credit via Form 8288-A.

Final Thoughts

Form 706-NA serves an important purpose in ensuring the U.S. collects estate taxes on American assets owned by foreign nationals. While the $60,000 threshold is much lower than for residents, careful planning and professional guidance can minimize taxes.

For current forms, visit IRS.gov/Form706NA.

Sources:

• Instructions for Form 706-NA (Rev. September 2021)
• Frequently Asked Questions on Estate Taxes for Nonresidents Not Citizens
• Transfer Certificate Filing Requirements