Medicare & U.S. Taxes on Spain’s Non-Lucrative Visa (NLV): Q&A (2025)

Author: María de Castro — Last updated: September 2025
For U.S. citizens/residents considering or holding Spain’s Non-Lucrative Visa.

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Medicare while you live in Spain (NLV)

Q: Can I use Medicare in Spain?
A: Generally, no. Original Medicare doesn’t cover routine care outside the U.S. (only very narrow emergencies). Even if you keep Medicare, the NLV still requires private health insurance in Spain (no copays).

Q: Should I keep Part A and Part B if I move on NLV?
A:

• Part A (hospital): If you’re eligible premium-free, most people keep it. It won’t cover Spain, but it helps when you’re back in the U.S.
• Part B (outpatient): If you drop it while abroad, re-enrolling later can mean a lifetime late-enrollment penalty and limited windows. Many expats keep Part B to avoid penalties. Run the math for your situation.

Q: What about Medigap and Medicare Advantage (Part C)?
A:

• Medigap sometimes includes limited foreign emergency benefits (caps/time limits). Not a substitute for Spanish private cover.
• Medicare Advantage plans typically don’t cover care outside U.S. networks except certain emergencies. Check your plan.

Q: And Part D (prescriptions)?
A: Part D isn’t usable abroad. In Spain you’ll rely on your Spanish private policy (or, later, any public-system access you obtain).

Q: Does NLV let me use Spain’s public healthcare and skip private insurance?
A: No. The NLV requires private, no-copay insurance for approval/renewal. Later you can explore other access routes, but the visa itself is tied to private cover.

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U.S. tax filing when you’re on NLV

Q: Do I still have to file U.S. taxes?
A: Yes. U.S. citizens must file a Form 1040 annually on worldwide income, even when living in Spain.

Q: Can I use the Foreign Earned Income Exclusion (FEIE)?
A: Usually no with NLV, because the NLV prohibits working. FEIE excludes earned income (wages/self-employment), not pensions, interest, dividends, or rents. Most NLV holders have passive income only → FEIE doesn’t apply.

Q: How do I avoid double taxation?
A: Typically via the Foreign Tax Credit (Form 1116), claiming credit in the U.S. for Spanish taxes paid on the same income. The U.S.–Spain tax treaty also allocates taxing rights by income type, e.g.:

• Private pensions: generally taxed where you’re tax resident (Spain, if resident there).
• U.S. Social Security: generally taxed only in the U.S. (Spain may apply “exemption with progression” to set your Spanish rate).

Q: When do I become a Spanish tax resident?
A: If you spend >183 days in Spain in a calendar year (or meet other “center of vital interests” tests), you’re typically Spanish tax resident and taxed there on worldwide income (with treaty/credits to prevent double tax).

Q: Any extra U.S. reporting for accounts in Spain?
A:

• FBAR (FinCEN 114): if your aggregate foreign-account balances exceed $10,000 at any time in the year.
• FATCA (Form 8938): higher thresholds for bona fide foreign residents (e.g., single: ≥$200,000 at year-end; varies by status).
  Spain also has its own foreign-assets reports (e.g., Modelo 720/721) once you’re resident there.

Q: Will passive income (pensions, dividends, rentals) be taxed in both countries?
A: You’ll report to both, but use treaty rules and foreign tax credits so you don’t pay twice on the same income. Treatment depends on the income category.

Q: Do I need a U.S. mailing address for Medicare/banking?
A: Many providers expect a U.S. address. Confirm with your insurer/administrator what they accept and how to manage billing while abroad.

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Practical tips (quick checklist)

• Keep Part A; evaluate Part B carefully before dropping it (penalties).
• Budget for Spanish private insurance (no copays) to meet NLV rules.
• Track days in Spain; >183 can trigger Spanish tax residency.
• Map each income stream (pension, Social Security, dividends, rental) to treaty rules and plan Form 1116 credits.
• Don’t forget FBAR/FATCA (U.S.) and Modelo 720/721 (Spain) if you’re resident.
• Coordinate with a cross-border tax advisor; optimize before your first Spanish tax year starts.

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Need help aligning NLV, Medicare, and taxes?

We can coordinate your NLV application, Spanish private insurance, and cross-border tax setup so you avoid gaps and penalties.

• Learn about the Non-Lucrative Visa (NLV) and start your checklist.
• Explore Property Purchases / Conveyancing if you plan to buy.
• Review Wills & International Estate Planning for cross-border assets.
• Consider a Lasting Power of Attorney for peace of mind.

This article is general information, not legal or tax advice. Get personalized guidance for your circumstances in the U.S. and Spain.

Source: the US$10,000 FBAR reporting threshold is set by the US Treasury’s Financial Crimes Enforcement Network (FinCEN Form 114, Report of Foreign Bank and Financial Accounts). US reporting thresholds and rules are set by US law and can change — confirm your current position with a US tax specialist. This is general information, not legal or tax advice.