Americans who relocate to France for a job, a marriage, or retirement in Paris or Provence quickly learn that two tax authorities now have a claim on their income: the Direction generale des Finances publiques, France's tax administration, and the IRS back home. US expat taxes in France are not optional and they do not cancel each other out. Because France taxes its residents on worldwide income and the United States taxes its citizens and green card holders no matter where they live, an American living in France typically owes a filing obligation in both countries every year. France also layers social charges on top of its income tax, a feature that surprises many new arrivals and that carries its own separate US tax treatment. The entire planning exercise is about coordinating both systems so the same euro of income is never taxed twice.
Do US Citizens Living in France Have to File Both French and US Tax Returns?
Yes, in almost every case. France taxes individuals who are resident there, generally meaning their home, main place of activity, or center of economic interests is in France, on their worldwide income through the Direction generale des Finances publiques. The United States separately taxes its citizens and green card holders on worldwide income no matter where they live, a rule that has nothing to do with French residency and everything to do with US citizenship or immigration status.
That means the two filing obligations run independently of each other. Filing and paying tax in France does not excuse you from filing a US Form 1040, and filing a US return does not excuse you from your French obligations. The mechanisms that keep the same income from being taxed twice, the Foreign Earned Income Exclusion, the Foreign Tax Credit, and the US-France tax treaty, operate on the US side of that equation, not as a substitute for either filing.
How Does France Tax Residents on Worldwide Income?
France applies its personal income tax, the impot sur le revenu, on a worldwide basis to anyone who qualifies as a tax resident, and that is the starting point for figuring out what an American in France actually owes there before turning to the US return. On top of income tax, France also imposes social charges, commonly referred to as CSG and CRDS, which apply to a broad range of income including wages, investment income, and certain pensions.
Combined, French income tax and social charges generally run high relative to comparable US tax, without needing exact rates or brackets to plan around that fact. What matters most for US planning purposes is that the IRS has generally treated CSG and CRDS as creditable foreign income taxes for Foreign Tax Credit purposes, rather than as non-creditable social security-type taxes, which is a meaningfully favorable position for Americans in France. Because the creditability of any specific charge in a specific year can depend on how it is characterized, the treatment of CSG, CRDS, and any other French social charge should be confirmed with a professional before you rely on it.
Should You Claim the FEIE or the Foreign Tax Credit on French Income?
For most Americans earning wages in France, the Foreign Tax Credit on Form 1116 is the stronger tool, because combined French income tax and social charges generally run higher than the comparable US federal rate on the same income. When that is true, the credit can eliminate US tax on your French-source income entirely and still leave unused credit on the table.
The Foreign Earned Income Exclusion on Form 2555 works differently: it excludes foreign earned income up to an annually indexed maximum, for example $130,000 for 2025, from US taxable income in the first place under IRC §911. That can be simpler for income under the cap, but it comes with real costs. The FEIE does nothing for self-employment tax, claiming it can disqualify the refundable Additional Child Tax Credit for a family with kids, and once you revoke the election you generally cannot re-elect it for five years without IRS consent. The Foreign Tax Credit, by contrast, is computed by category under IRC §§901 and 904, and any credit you cannot use in the current year carries back one year and forward ten years on Schedule B of Form 1116, which you can use in a future year when your foreign taxes fall below the Form 1116 limit. Our FEIE versus Foreign Tax Credit comparison walks through the decision in more detail, and the two elections can also be combined across different income types in the same year.
What Does the US-France Tax Treaty Do for Double Taxation?
The United States and France have a comprehensive income tax treaty, signed in 1994 and in force since 1995, later updated by additional protocols. Like nearly every US treaty, it contains a saving clause that lets the United States tax its own citizens and green card holders largely as if the treaty did not exist, so the domestic Foreign Tax Credit and Foreign Earned Income Exclusion mechanisms described above do most of the actual work of avoiding double taxation on wages.
Where the treaty matters most is in the details: tie-breaker rules for residency when someone could be considered a resident of both countries in the same year, specific provisions touching certain US-source pensions and retirement accounts that can be more favorable than the general rule, and rules for business profits and investment income. Because treaty provisions have to be read in their specific text, any position relying on a specific treaty article beyond the general saving-clause framework, including any pension provision, should be reviewed against the actual treaty language before you file.
Does the US-France Totalization Agreement Cover Social Security?
Yes. A totalization agreement between the United States and France has been in force since July 1, 1988, and it exists specifically to stop a worker from paying into both countries' social security systems on the same earnings at the same time. Without it, an American employee or self-employed person working in France could owe both French social insurance contributions and US self-employment tax on the identical income.
The agreement works by assigning coverage to a single system based on where the work is performed and how long the assignment is expected to last, documented with a certificate of coverage. Depending on the direction of the assignment, the certificate is issued by the Social Security Administration, to keep someone covered under the US system while working temporarily in France, or by the relevant French social security body, to keep someone covered under the French system. Self-employed Americans in France should not assume US self-employment tax automatically applies; our guide to totalization agreements and self-employment tax abroad covers how the certificate process works.
How Are French Pensions and Retirement Accounts Taxed by the US?
Not automatically. France offers several distinct retirement vehicles, including the state pension system and private or employer-sponsored plans such as the Plan d'Epargne Retraite. Being tax-favored under French law does not, by itself, make any of these tax-deferred for US purposes.
The general US rule, under the operation of IRC §§401(a) and 402(b), is that income accruing inside a foreign retirement plan is taxed currently to a US person unless a specific treaty provision defers it. Whether the US-France treaty provides that deferral, and for which type of French plan, is fact-specific and has to be analyzed against the actual treaty text rather than assumed. Because the analysis is the same regardless of which country the plan is in, our foreign pension US tax treatment guide walks through the four questions that determine the answer for any foreign plan: whether growth is taxed as it accrues, whether a treaty defers it, what has to be reported, and how distributions are taxed.
Are French Investment Funds Taxed as PFICs?
Usually, yes, and this is one of the more expensive surprises for Americans investing through a French brokerage. A French SICAV or FCP, along with most ETFs domiciled in France or elsewhere in the EU, typically meets the definition of a passive foreign investment company under IRC Section 1297, with Sections 1291 and 1298 governing the tax treatment. That classification is a matter of US tax law and does not turn on how the fund is taxed inside France under its own domestic rules.
Once a fund is a PFIC, the default US tax treatment is punitive: absent a timely election, gains and certain distributions are spread over your holding period, taxed at the highest rate in effect for each of those years, and hit with an interest charge on top. Each PFIC generally requires its own Form 8621 filing, and the reporting obligation applies even in a year where no tax is actually due. This is one of the clearest reasons Americans in France are usually steered toward US-domiciled brokerage accounts and US-based index funds for new investing rather than funding a French assurance-vie contract or a Plan d'Epargne en Actions with local SICAVs and FCPs.
What Else Do You Have to Report to the IRS?
Beyond the income tax return itself, French financial accounts and investments carry their own separate information-reporting obligations that apply whether or not any US tax is owed. These filings are enforced on their own terms, and the penalties for missing them are typically far larger than any tax that would have been due.
The France Reporting Stack
Reference- FBAR (FinCEN Form 114). Required when the combined balance of your French bank, brokerage, and pension-related accounts exceeds $10,000 at any point during the year. See our FBAR filing guide.
- Form 8938 (FATCA, IRC §6038D). A separate filing threshold, higher for Americans living abroad, that can require you to list the same French accounts directly on your federal tax return. See our Form 8938 guide.
- Form 8621 (PFIC). Generally required for each French SICAV, FCP, or other pooled fund that qualifies as a passive foreign investment company. See our PFIC and Form 8621 guide.
Whether you even count as a US tax resident in the first place, if your situation is more complicated than straightforward citizenship, such as a long visit on a work visa before a move became permanent, is a separate question governed by the substantial presence test.
Bottom Line
Living in France does not simplify your US tax picture, it adds a second filing system on top of it. The Direction generale des Finances publiques and the IRS operate independently, and the tools that prevent double taxation, primarily the Foreign Tax Credit given France's generally high combined income tax and social charges, along with the treaty's narrower provisions and the totalization agreement for social security, have to be applied deliberately rather than assumed. Pensions, French investment funds, and foreign accounts each carry their own reporting rules on top of the income tax analysis, and getting any one of them wrong tends to cost more in penalties than the underlying tax ever would have.
Have questions about US expat taxes in France? Contact TS CPA for a free consultation. We respond within the same day.
Official IRS and Government Sources
- IRS, Foreign Earned Income Exclusion
- IRS, Foreign Tax Credit
- IRS, US Citizens and Resident Aliens Abroad
- IRS, United States Income Tax Treaties A to Z
- Social Security Administration, US-France Totalization Agreement
- FinCEN, Report of Foreign Bank and Financial Accounts (FBAR)
- IRS, About Form 8621
- IRC Section 911, Citizens or Residents Living Abroad