Expat Tax Online highlights what US business owners abroad should know as NCTI rules take effect for the 2026 tax year
YORK, United Kingdom, Sept. 28, 2026 (GLOBE NEWSWIRE) -- The former Global Intangible Low-Taxed Income (GILTI) regime has been replaced by Net CFC Tested Income (NCTI) for tax years beginning after December 31, 2025, bringing changes that could affect US citizens and Green Card holders who own or control businesses overseas.
"The shift from GILTI to NCTI is more than a name change. US owners of foreign companies should carefully review how the new calculation affects their structure before the first NCTI filing season", said Darryl Albuquerque, Senior Tax Manager at Expat Tax Online.
Here are the major changes under the new NCTI regime:
- QBAI is eliminated: The QBAI-based tangible asset return no longer reduces the amount that may be subject to Section 951A.
- Section 250 deduction is reduced: The deduction generally decreases from 50% to 40%.
- Foreign tax credit treatment improves: The deemed-paid foreign tax credit percentage generally increases from 80% to 90%.
For calendar-year taxpayers, an important timing distinction applies: tax returns for 2025 filed in 2026 generally still use the GILTI rules, while the new NCTI rules generally apply to the 2026 tax year.
These changes do not automatically result in every affected taxpayer owing more US tax. The outcome can depend on the company's foreign tax rate, income, ownership structure, and whether a Section 962 election is used.
About Expat Tax Online
Expat Tax Online is the most trusted US expat tax service for Americans living abroad. With more than 10,000 positive reviews from US expats, the global tax firm focuses exclusively on helping Americans abroad manage their US tax obligations. With clients in more than 150 countries, the firm delivers specialist support for US tax returns, FBARs, foreign trusts, and other international tax reporting requirements.
Visit www.expattaxonline.com to learn more.
Contact:
Email: Clark@expattaxonline.com
Tel: +44 (0) 1904 211 005 (UK)
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