U.S. Taxes for Americans Living in France: The 2026 Guide

Key takeaways

• Moving to France does not end your U.S. filing obligation. U.S. citizens are taxed on worldwide income wherever they live, and Article 29(2) of the U.S.–France treaty (the "saving clause") preserves the U.S. right to tax its citizens as if the treaty did not exist, subject to listed exceptions.
• France usually taxes wages more heavily than the U.S. does, so the foreign tax credit (Form 1116) generally eliminates U.S. income tax on French salary and builds carryovers. The foreign earned income exclusion (FEIE, $132,900 for 2026) often also produces zero U.S. tax, but it forfeits the refundable child tax credit and credits on the excluded income.
• The IRS no longer challenges foreign tax credits for French CSG and CRDS. This changed in 2019 after a diplomatic understanding that these levies are not covered by the U.S.–France Social Security agreement. Report your gross French salary (salaire brut), not the net figure on your French tax notice.
• The treaty's pension article is unusual and favorable on one point: as amended in 2004, U.S. Social Security and distributions from U.S. retirement plans paid to a French resident are taxable only in the United States, and this rule is an exception to the saving clause. France must give a credit equal to its own tax on that income.
• French investment funds are a trap. French SICAVs, FCPs and fund units held in an assurance-vie or PEA may be passive foreign investment companies (PFICs) for U.S. purposes, with punitive default taxation and annual Form 8621 filings.
• Treaty credits cannot offset the 3.8% Net Investment Income Tax. On August 31, 2026, the Federal Circuit reversed the Christensen decision that had allowed U.S. citizens in France to use the treaty credit against the NIIT.

Who is affected, and why living in France changes nothing on the U.S. side

The IRS states that a U.S. citizen or resident alien's worldwide income is generally subject to U.S. income tax "regardless of where you are living," and that filing requirements are the same as for someone living in the United States (IRS Publication 54). Whether you must file depends on worldwide gross income, filing status and age; for the filing threshold test, income you later exclude under the FEIE still counts as gross income. Self-employed individuals must file if net self-employment earnings are $400 or more.

The treaty does not override this. The U.S.–France income tax convention was signed in Paris on August 31, 1994, and amended by protocols signed December 8, 2004 and January 13, 2009. Article 29(2), as amended by the 2004 Protocol, allows the United States to "tax its residents … and its citizens as if the Convention had not come into effect." The term "citizen" includes, for ten years, a former citizen or long-term resident whose loss of status had tax avoidance as a principal purpose. The Treasury Technical Explanation of the 1994 Convention confirms that the United States reserves the right to tax citizens resident in France on their worldwide income under normal Code rules, subject to paragraph 3 of Article 29.

What the saving clause does not override (Article 29(3), as amended in 2004):

Benefit	Available to U.S. citizens in France?
Art. 18(1) — exclusive source-country taxation of social security and pension distributions	Yes
Art. 24 — relief from double taxation (including U.S. foreign tax credit and re-sourcing)	Yes
Art. 25 — non-discrimination; Art. 26 — mutual agreement procedure	Yes
Art. 9(2), Art. 13(3)(a) — corresponding adjustments; certain business-property gains	Yes
Art. 18(2) — pension contribution relief	No — only for people who are neither U.S. citizens nor green card holders
Arts. 19, 20, 21, 31 — public remuneration, teachers, students, diplomats	No — same restriction

Green card holders living in France remain U.S. tax residents under the green card test while the card is valid (Publication 54). Unlike citizens, they may be able to use the residence tie-breaker in Article 4(3) to be treated as a French resident for treaty purposes. The consequences for U.S. reporting and for green card status were not reviewed for this guide. (The U.S. procedural consequences of claiming treaty non-residence as a green card holder — Form 8833 filing and possible effects on long-term resident status — were not confirmed in the sources reviewed.)

Mixed-nationality couples. A U.S. citizen married to a non-U.S. spouse may elect to treat the spouse as a U.S. resident and file jointly. That spouse is then taxed on worldwide income and cannot claim treaty non-residence for the years the election is in force (Publication 54). The election is often unattractive when the French spouse has significant income or French investment funds, but it depends entirely on the facts.

What the U.S.–France treaty actually says

Residence and the tie-breaker (Article 4)

Article 4(1) defines a resident as a person liable to tax in a state by reason of domicile, residence or similar criteria. Article 4(2)(a) is France-specific: France treats a U.S. citizen or green card holder as a U.S. resident only if that person has a substantial presence in the United States or would be a U.S. resident (and not a third-country resident) under the tie-breaker principles. In practice, a U.S. citizen living full-time in France with no substantial U.S. presence is not a U.S. resident for France's treaty purposes.

Where an individual is resident in both states, Article 4(3) applies the standard sequence: permanent home → center of vital interests → habitual abode → nationality → competent-authority agreement. For a U.S. citizen, the tie-breaker settles which state is the treaty residence state (important for which country gives the credit), but because of the saving clause it does not remove U.S. tax.

Categories of income

Income	Treaty rule (simplified)	Article
Wages for work performed in France	Taxable in France; U.S. taxes citizens under the saving clause and gives a credit	15, 24, 29
Dividends	Source state may tax at up to 15% (5% for qualifying corporate holdings)	10
Interest	Generally taxable only in the residence state	11
Royalties	Source tax capped at 5%; copyright royalties exempt at source	12
Gains on real property	Taxable where the property is located	13(1)
Other capital gains	Generally residence state only	13(6)
Social security; distributions from pension/retirement plans	Taxable only in the source state (where the plan is established)	18(1), as replaced in 2004
Government salaries	Generally only the paying state	19

The 2009 Protocol updated the treaty's dividend, limitation-on-benefits and mutual agreement provisions, including binding arbitration (U.S. Senate Executive Report 111-1). Those changes mainly affect companies and investors rather than individuals' day-to-day compliance.

What is different from other U.S. treaties

1. Re-sourcing and the "three-bite" structure (Article 24). For a U.S. citizen resident in France, the United States allows a credit for French income tax after France has given its own credit for U.S. tax on U.S.-source items. To make that work, income that the treaty would otherwise leave exempt from U.S. tax, and income on which France gives a credit, "shall be considered income from sources within France" to the extent needed (Art. 24(1)(b)(ii)). This re-sourcing applies only to "French income tax" as defined in Article 24(1)(e).
2. France gives credits for certain U.S.-source income of U.S. citizens (Article 24(2)(b)). For U.S. citizens resident in France, France grants a credit equal to the French tax on, among other items: dividends and interest paid by the U.S. government or by publicly traded U.S. companies, gains on the related assets, profits on U.S. public options/futures markets, and U.S.-source alimony and annuities. The effect is that France does not collect income tax on these items, leaving the United States to tax them. The benefit is conditioned on the taxpayer showing compliance with U.S. tax obligations.
3. Wealth tax carve-out (Article 23(6)). A U.S. citizen resident in France who is not a French national may exclude assets located outside France from the French wealth tax base for the five years after becoming resident. (Article 23(6) refers to the former impôt de solidarité sur la fortune; whether and how France applies it to the current real-estate wealth tax (IFI) was not confirmed in a French primary source reviewed.)
4. U.S. state taxes deductible in France (Article 29(7)(b)). For French tax, U.S. state and local income taxes on personal-service and business income are allowed as business expenses for U.S. citizens resident in France.
5. U.S. stock options (Article 29(7)(a)). For French tax, option benefits from U.S. companies (other than capital gain) are income when and to the extent they give rise to ordinary income for U.S. purposes.
6. Covered taxes. The French taxes listed in Article 2 are income tax, company tax, the tax on salaries and the former wealth tax. CSG and CRDS are not listed. (Whether CSG/CRDS are "identical or substantially similar" taxes covered by the treaty under Article 2(2), and therefore within France's Article 24 credit, was not resolved in the sources reviewed. Their U.S. creditability under Code section 901 is a separate question — see FEIE vs. foreign tax credit in France.)

FEIE vs. foreign tax credit in France

For the general mechanics of each tool, the stacking rule, and worked 2026 examples outside France-specific rates, see our guide on FEIE vs. Foreign Tax Credit.

The two tools

Foreign earned income exclusion (Form 2555). For 2026 the maximum exclusion is $132,900 (IRS news release IR-2025-103; Rev. Proc. 2025-32). You qualify only if your tax home is in a foreign country and you pass either the bona fide residence test (resident for an uninterrupted period including a full tax year) or the physical presence test (330 full days abroad in any 12 consecutive months) (Instructions for Form 2555). Pensions, Social Security, interest, dividends and capital gains are not foreign earned income. A housing exclusion or deduction may apply above a base amount; for 2026 secondary sources report a base housing amount of $21,264 and a standard cap of $39,870. (KPMG GMS Flash Alert 2025-226 summarizing Rev. Proc. 2025-32 — the Rev. Proc. itself was not retrieved.) (Whether Paris or other French cities are listed with a higher housing cap in the IRS's annual high-cost-locations notice (Notice 2025-16 for 2025; the 2026 notice) was not confirmed.)

Foreign tax credit (Form 1116). French income taxes paid on income reported to the United States are credited dollar for dollar against U.S. tax, up to a limit based on the share of foreign-source income in each category. Under Article 24(1), the United States must allow the credit for French income tax subject to U.S. law limitations.

Rules that tilt the choice in France

• No double dipping. You cannot claim a credit or deduction for foreign taxes allocable to income you exclude (Instructions for Form 2555).
• Stacking. If you claim the FEIE, the tax on your remaining income is computed at the rates that would have applied without the exclusion (Publication 54; Instructions for Form 2555).
• Lost credits. Claiming the FEIE or housing deduction bars the additional (refundable) child tax credit and the earned income credit (Instructions for Form 2555).
• Revocation lock-in. Once you revoke the FEIE election, you cannot claim it again for the next five tax years without IRS approval (Instructions for Form 2555).
• CSG/CRDS are creditable. The IRS historically denied credits for CSG and CRDS on the ground that they were covered by the U.S.–France Social Security agreement. After the State Department confirmed in 2019 a shared U.S.–French understanding that they are not covered, the IRS stopped challenging these credits (IRS LB&I Practice Unit "French Foreign Tax Credits," revised August 28, 2019). (The underlying joint directive LB&I-04-0819-007 (August 2019) was read via Tax Notes; the IRS page hosting the directive returned an error.) The Practice Unit notes that it "is not an official pronouncement of law."
• Social security contributions are different. Contributions paid under the totalization agreement (French pension, health and similar social insurance contributions, as opposed to CSG/CRDS) are not creditable; the Practice Unit refers to the "off-Code provision" of the Social Security Amendments of 1977 that bars credits for taxes paid under a totalization agreement. (The statutory text (section 317(b)(4) of the 1977 Social Security Amendments) was not retrieved directly.)
• Gross, not net. The IRS Practice Unit warns that French tax notices show net salary; the amount to convert and report as wages is the gross salary (salaire brut) on the year-end payslip.
• Joint French return, separate U.S. return. If you file jointly in France but married filing separately in the U.S., the IRS expects French tax to be allocated in proportion to each spouse's income (IRS Practice Unit; Treas. Reg. 1.901-2(f)(3)).

Worked example (tax year 2026)

Assumptions (illustrative): single U.S. citizen, Paris-based employee of a French company, gross salary €90,000, no other income. Exchange rate assumed at €1 = $1.15 for illustration only. Net taxable salary (after deductible social contributions) assumed at 78% of gross. (The 78% ratio is a simplifying assumption, not a sourced figure; actual employee contribution rates vary.) French income tax uses the scale for 2025 income (the latest enacted), because the scale for 2026 income will be set by the 2027 finance law. (As of the date of this guide, no enacted scale for 2026 income was found in the sources reviewed.)

French side

Item	Amount
Gross salary	€90,000
Net taxable salary (assumed 78%)	€70,200
10% standard deduction for professional expenses	–€7,020
Taxable income (1 part)	€63,180
Income tax: 0% to €11,600; 11% to €29,579; 30% above	€12,058
CSG + CRDS (assumed 9.7% on 98.25% of gross)	€8,577
Creditable French taxes	€20,635 ≈ $23,730

The scale (0% up to €11,600; 11% to €29,579; 30% to €84,577; 41% to €181,917; 45% above) is from Service-Public.fr (verified April 15, 2026). (The 10% professional-expense deduction and its cap, and the CSG/CRDS rates and base (9.2% + 0.5% on 98.25% of gross salary), were not confirmed in a French primary source reviewed.)

U.S. side

	FTC route	FEIE route
Wages ($)	103,500	103,500
Excluded	—	–103,500
Standard deduction (2026, single)	–16,100	(no taxable income left)
Taxable income	87,400	0
Tentative tax (2026 brackets)	13,940	0
Foreign tax credit	–13,940	n/a (taxes on excluded income not creditable)
U.S. income tax	$0	$0
Unused French tax carried over	~$9,790	$0
Refundable child tax credit possible?	Yes, if otherwise eligible	No

2026 standard deduction and brackets are from IR-2025-103. U.S. tax: 10% × $12,400 + 12% × $38,000 + 22% × $37,000 = $13,940.

Reading the result. At this income level France's combined income tax and CSG/CRDS exceed the U.S. tax on the same wages, so both routes produce zero U.S. income tax. The credit route usually leaves you better positioned: it preserves child-related refundable credits, avoids the five-year revocation trap, and banks excess French tax that can absorb future U.S. tax on general-category foreign income (for example, salary above the FEIE cap later, or a bonus year). (The carryback (one year) and carryforward (ten years) periods for excess foreign tax credits are as commonly stated under Code section 904(c); the relevant Publication 54/514 text was not retrieved in full.)

When the FEIE might still make sense in France: very low French tax in a given year (for example, a first partial year, or heavy French deductions), or a taxpayer with no children who values simplicity. Model both methods before committing.

Social Security: the U.S.–France totalization agreement

The United States and France signed a social security agreement on March 2, 1987, effective July 1, 1988 (French Senate, written question no. 16147, 1991). The SSA summarizes its France agreement on its International Programs page.

Employees. As a general rule under totalization agreements, you pay social security taxes only to the country where you work; a worker temporarily sent abroad may remain covered only by the home system (Publication 54). A U.S. citizen hired locally by a French employer is therefore normally in the French system and not subject to FICA on those wages. (The maximum duration for a temporary "detached worker" to stay in U.S. Social Security under the France agreement (commonly cited as five years) was not confirmed; the SSA agreement text page returned an error.) To prove exemption from U.S. coverage, your employer in France requests a certificate of coverage (form SE-404-1 or SE-404-2) from the French health insurance fund that collects your contributions (SSA).

Self-employed. The SSA states that self-employed workers who work only in France are assigned French coverage; those who normally work in the U.S. but transfer their activity to France for two years or fewer keep U.S. coverage; and those working in both countries are covered where their principal activity is. A U.S. citizen running a business from France therefore normally pays French social charges and not U.S. self-employment tax — but only with documentation. Without it, U.S. self-employment tax applies, and the FEIE does not reduce self-employment tax (Publication 54).

Health care. The SSA warns that a worker exempted from French social security taxes under the agreement cannot receive French public health benefits and must arrange private health insurance before the exemption applies.

Benefits. If you have credits in both systems, each country may pay a benefit; the U.S. counts French credits only if you have at least six U.S. credits and not enough to qualify on your own (SSA). Residents of France can file through the Federal Benefits Unit at the U.S. Embassy in Paris or any French social security office.

Taxation of benefits. Under Article 18(1) as amended in 2004, U.S. Social Security paid to a French resident is taxable only in the United States, and this rule overrides the saving clause. France must take the income into account but grant a credit equal to the French tax attributable to it (Article 24(2)(a)(i)). (Whether France applies French social levies (prélèvements sociaux) to U.S. Social Security or U.S. pension income of residents was not confirmed in a French primary source.)

U.S. retirement accounts (401(k), IRA, Roth)

Distributions. Article 18(1), as replaced by the 2004 Protocol, gives the source state exclusive taxing rights over "pension distributions and other similar remuneration … in consideration of past employment," periodic or lump sum, paid to a resident of the other state. A distribution arises in a state only if paid by a plan established there. The Treasury Technical Explanation confirms the rule is exclusive source-country taxation and is an exception to the saving clause. In practice:

• 401(k), traditional IRA and similar U.S. plan distributions to a French resident: taxable only in the United States under the treaty; France gives a credit equal to its own tax.
• Roth IRA qualified distributions: under the same logic they are U.S.-source distributions taxable only by the U.S., which does not tax qualified Roth distributions. (French administrative guidance (BOFiP) confirming that France treats Roth IRA distributions this way was not located. Note that Article 18(1) is drafted around remuneration "in consideration of past employment"; whether it covers IRA amounts funded by personal (non-employment) contributions was not confirmed.)
• French pension paid to a U.S. citizen living in France: Article 18(1) does not apply because the payee resides in the same state as the plan. The U.S. taxes the citizen under the saving clause, with a credit for French tax. (This is the author's reading of the treaty text; the Technical Explanation illustrates only the reverse case of a U.S. citizen in the U.S. receiving a French pension, which is taxable solely in France.)

Contributions while working in France (Article 18(2)). An individual working in France who is resident but not a French national may deduct in France contributions to a U.S. plan if contributions began before arriving in France. For France, U.S. 401(a) plans, IRAs (including SEP and SIMPLE IRAs), 403(a) and 403(b) plans are automatically treated as corresponding plans, and the Technical Explanation states that Roth IRAs are included. Relief follows French mandatory-plan limits. The reverse does not help U.S. citizens: under Article 29(3)(b), U.S. relief for contributions to French plans applies only to people who are neither U.S. citizens nor green card holders.

Growth inside U.S. plans. Not found in the sources reviewed: an explicit treaty or French administrative statement that France will not tax annual earnings accruing inside a U.S. 401(k) or IRA before distribution.

Contributing to an IRA while abroad. If you claim the FEIE, special rules apply in figuring the IRA deduction (Instructions for Form 2555, referring to Publication 590-A). (The Publication 590-A rule that excluded foreign earned income is not compensation for IRA purposes was not retrieved.) PFIC funds held inside an IRA do not make you a PFIC shareholder (Instructions for Form 8621).

Withholding. U.S. payers of pension and IRA distributions must generally withhold U.S. income tax on payments delivered outside the United States unless you give a U.S. address or certify non-U.S. status, which a citizen cannot (Publication 54).

Local investments: PFICs, assurance-vie, PEA, PER and savings accounts

For the full mechanics of the default §1291 regime, the QEF and mark-to-market elections, and Form 8621 reporting, see our guide on PFICs.

PFIC exposure on French funds

A foreign corporation is a PFIC if 75% or more of its gross income is passive or at least 50% of its assets produce passive income (Instructions for Form 8621). Publication 54 warns that an individual who owns "a mutual fund or ETF that is not domiciled in the United States" may have a Form 8621 obligation. French SICAVs and most UCITS funds sold by French banks fall in that zone. (Whether a French FCP (fonds commun de placement) is classified as a corporation for U.S. tax purposes — and thus potentially a PFIC — depends on the U.S. entity-classification rules applied to each fund; this was not confirmed. The 2004 Protocol treats an FCP as a partnership only for claiming U.S. treaty benefits.)

Default regime (section 1291). Without an election, gains on sale are entirely "excess distributions." Excess distributions allocated to prior years are taxed at the highest individual rate in effect for each year, plus an interest charge (Instructions for Form 8621).

Elections.

• QEF election — requires an annual PFIC information statement from the fund; most French funds do not provide one. (No source reviewed lists which French funds issue PFIC annual information statements.)
• Mark-to-market election — available only for "marketable stock" (regularly traded on a qualifying exchange); gains are taxed annually as ordinary income.

Filing. A separate Form 8621 is generally required for each PFIC. Part I need not be completed if the total value of all your PFIC stock is $25,000 or less ($50,000 joint) at year-end and you had no excess distribution or disposition (Instructions for Form 8621).

Assurance-vie

IRS treatment of the French assurance-vie (whether it qualifies as life insurance under Code section 7702, whether the policyholder is taxed on underlying funds, and PFIC look-through) was not found in the sources reviewed. What is confirmed: a foreign-issued life insurance or annuity contract with a cash value is reportable on both the FBAR and Form 8938 (IRS, "Comparison of Form 8938 and FBAR requirements"). (Whether the U.S. excise tax on insurance premiums paid to foreign insurers (Form 720) applies to assurance-vie premiums; Article 2(1)(a)(ii) brings this excise tax within the treaty's scope, but no exemption provision was confirmed.)

PEA

A PEA is a French tax-favored wrapper; the United States does not recognize it. Income and gains inside it are taxable for U.S. purposes as earned, and funds or ETFs held inside it are subject to the PFIC rules. (No IRS statement specific to the PEA was found; this follows from the general rules that U.S. citizens are taxed on worldwide income and that foreign-domiciled funds may be PFICs.)

PER and other French retirement savings

IRS guidance notes that "a foreign trust may include a foreign pension or retirement plan treated as a trust," which can trigger Form 3520/3520-A reporting, with exceptions under Rev. Proc. 2020-17 and proposed regulations section 1.6048-5 for certain tax-favored foreign retirement trusts (IRS, "U.S. citizens and residents abroad – Filing requirements"). (Whether a French PER (plan d'épargne retraite) meets the Rev. Proc. 2020-17 or proposed-regulation conditions was not confirmed.) Contributions to a PER are not deductible for U.S. purposes for a U.S. citizen (Article 29(3)(b), see U.S. retirement accounts, above).

Livret A, LDDS and similar accounts

Interest that is tax-exempt in France is still taxable U.S. income. Because there is no French tax on it, there is nothing to credit. (The French exemption of Livret A interest was not confirmed in a French primary source reviewed.)

French tax on U.S. investments

Under Article 24(2)(b), France gives U.S. citizens a credit equal to French tax on dividends and interest from the U.S. government and publicly traded U.S. companies, among others. (Whether France nevertheless levies prélèvements sociaux on such income for U.S. citizens; the 2026 French reform introduced two CSG rates on investment income, per the French government's info.gouv.fr notice, but the rates and their application to treaty-protected U.S. income were not confirmed.)

Net Investment Income Tax

The 3.8% NIIT can apply to U.S. citizens abroad. On August 31, 2026, in Christensen v. United States, the Federal Circuit held that the foreign tax credit in Article 24 of the U.S.–France treaty cannot be used to offset the NIIT, reversing the Court of Federal Claims. (KPMG TaxNewsFlash (August 2026) and PwC Tax Insight summarizing the decision; the opinion itself was not retrieved.) (Further appeal status after August 31, 2026, and the NIIT thresholds ($200,000 single / $250,000 joint) were not confirmed in a primary source.)

FBAR and FATCA

FBAR (FinCEN Form 114). Required if the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the year — two accounts totaling more than $10,000 together trigger reporting of both. Filed electronically with FinCEN (not the IRS) through the BSA E-Filing System; due April 15 with an automatic extension to October 15. Accounts over which you have only signature authority are also reportable (IRS comparison chart).

Form 8938 (FATCA). Attached to Form 1040. For taxpayers living abroad, the thresholds are total specified foreign financial assets above $200,000 on the last day of the year or $300,000 at any time (single or married filing separately), or $400,000 / $600,000 (married filing jointly). Penalty: up to $10,000 for failure to disclose, plus $10,000 per 30 days after IRS notice, up to $60,000; criminal penalties may apply (IRS comparison chart).

What goes where (selected items)

Asset	FBAR	Form 8938
French bank and brokerage accounts	Yes	Yes
Foreign mutual funds	Yes	Yes
Foreign cash-value life insurance (e.g., assurance-vie)	Yes	Yes
Foreign real estate held directly	No	No
Foreign social-security-type benefits	No	No

Other information returns you may need: Form 8621 (PFICs), Form 3520 (foreign trusts, and gifts or bequests over $100,000 from non-resident aliens or foreign estates), Form 5471/8865 (foreign companies and partnerships). A Form 3520 failure generally triggers a penalty of the greater of $10,000 or a percentage of the amounts involved, and keeps the assessment period open (IRS filing-requirements page). Late or incomplete international information returns can suspend the statute of limitations and reduce your foreign tax credit (Publication 54).

FATCA in France. The United States and France signed a Model 1 intergovernmental agreement on November 14, 2013, under which French financial institutions report U.S. account holders to the French administration, which exchanges the data with the IRS (IRS–France Competent Authority Arrangement). Your French bank will ask for your U.S. taxpayer identification number. (Reports that some French banks refuse or close accounts held by U.S. persons are anecdotal and were not confirmed in a primary source.)

U.S. state taxes

Moving to France does not automatically end your obligations to the U.S. state you left. Most states tax residents based on domicile, which can persist after you move abroad if you keep a home, voter registration, driver's license or other ties there, and states do not follow the federal FEIE or the U.S.–France treaty in a uniform way. Review your last state of residence's domicile rules before departure and document your intent to leave — see our guide on state taxes after moving abroad for the framework. (No state tax authority source was reviewed for this guide; state rules vary significantly.) On the French side, Article 29(7)(b) lets U.S. citizens deduct U.S. state and local income taxes on personal-service and business income as business expenses.

Full worked example, tax year 2026

Facts (illustrative): Sarah, a single U.S. citizen, has lived in Paris since 2022. She is employed by a French company with gross salary €160,000. She also holds U.S. Treasury notes paying $5,000 of interest. No children, no PFICs, no other income. FX assumed at €1 = $1.15. Same simplifying assumptions as in Section 3 (net taxable = 78% of gross; 10% professional deduction; CSG/CRDS 9.7% on 98.25% of gross; 2025-income French scale). (These French parameters are assumptions, as flagged in Section 3.)

French tax (2026 income)

Item	Amount
Net taxable salary (78%)	€124,800
10% deduction	–€12,480
Taxable income (1 part)	€112,320
Income tax (top marginal bracket 41%)	€29,852
CSG + CRDS on salary	€15,248
Total creditable French tax	€45,100 ≈ $51,865
U.S. Treasury interest	Included in the French computation, but France gives a credit equal to the French income tax on it (Art. 24(2)(b)(i)(aa))

U.S. tax — Option A: foreign tax credit only

Item	$
Wages ($184,000) + interest ($5,000)	189,000
Standard deduction	–16,100
Taxable income	172,900
Tentative tax (24% top bracket)	34,094
General-category FTC limit (foreign share of taxable income, with the standard deduction apportioned by gross income)	33,192
Credit allowed (French tax available: $51,865)	–33,192
U.S. income tax due	≈ $902
Excess French tax carried over (general category)	≈ $18,673

U.S. tax — Option B: FEIE + credit on the remainder

Item	$
Wages + interest	189,000
FEIE	–132,900
Standard deduction	–16,100
Taxable income	40,000
Tax with stacking: tax on $172,900 minus tax on $132,900	9,600
French tax allocable to non-excluded wages ($51,865 × 51,100/184,000)	14,404
FTC limit (general category)	8,744
U.S. income tax due	≈ $856
Excess French tax carried over	≈ $5,659

What this shows

1. In both cases, French salary is fully sheltered and the residual U.S. tax comes from the U.S.-source Treasury interest, which France does not effectively tax (it gives a credit equal to its own tax) and which therefore has no French tax to credit in the United States.
2. Option B is about $46 cheaper this year because stacking puts the interest in a slightly different place, but it carries over roughly $13,000 less French tax and would forfeit the refundable child tax credit if Sarah had children. For most French residents with salary below the top bracket, Option A is the more robust long-term choice; the right answer depends on projected future income.
3. NIIT: Sarah's modified AGI (about $189,000; the FEIE amount is added back) is below the $200,000 single threshold, so no NIIT. Above it, the 3.8% would apply to the interest with no credit for French tax after Christensen. (NIIT threshold and FEIE add-back from IRC section 1411 not retrieved directly.)
4. Sarah must also file an FBAR (her French accounts exceed $10,000) and, if her French accounts exceed $200,000 at year-end or $300,000 at any time, Form 8938.

All U.S. figures use IR-2025-103 brackets ($12,400 / $50,400 / $105,700 / $201,775 thresholds for single filers). Computations are rounded; a real return would also allocate other deductions and may differ.

Common mistakes Americans make after moving to France

1. Reporting net instead of gross French salary. The IRS specifically flags this in its France Practice Unit.
2. Leaving CSG/CRDS off Form 1116 because of older advice that they were not creditable.
3. Defaulting to the FEIE without modeling the foreign tax credit, then being locked out for five years after revoking it.
4. Buying French bank funds, or funds inside an assurance-vie or PEA, without considering PFIC consequences.
5. Assuming French tax-free products are U.S. tax-free (Livret A interest, PEA gains, PER contributions).
6. Not filing FBAR / Form 8938, or forgetting accounts with signature authority only.
7. Ignoring Form 3520 for French retirement arrangements treated as foreign trusts or large gifts and inheritances from French relatives.
8. Paying U.S. self-employment tax unnecessarily — or not paying French charges — because the totalization rules and certificate of coverage were not handled.
9. Missing the June 15 extended deadline and assuming it also defers payment. The automatic two-month extension for taxpayers abroad requires a statement attached to the return; interest still runs from April 15 (Publication 54).
10. Joint French return, separate U.S. return, no allocation of French tax between spouses.
11. Overlooking unpaid U.S. tax debts: seriously delinquent federal tax debt can lead the State Department to deny, limit or revoke a U.S. passport (Publication 54).

Frequently asked questions

Do I have to file a U.S. return if I owe nothing because of the FEIE or foreign tax credit?

Yes, if your worldwide gross income is above the filing threshold. Income you exclude under the FEIE still counts for the threshold, and the exclusion itself must be claimed on Form 2555 attached to a return (Publication 54; Instructions for Form 2555).

When is my return due while living in France?

April 15, but you get an automatic extension to June 15 if your tax home and abode are outside the United States on the due date; attach a statement. Interest runs from April 15. You can request a further extension to October 15 with Form 4868, and a discretionary extension to December 15 by letter (Publication 54).

Will France tax my U.S. Social Security or 401(k)?

Under Article 18(1) of the treaty as amended in 2004, those payments to a French resident are taxable only in the United States; France takes them into account but grants a credit equal to its own tax. Whether French social levies apply was not confirmed in the sources reviewed.

Can I credit CSG and CRDS against U.S. tax?

Yes. Since 2019 the IRS no longer challenges foreign tax credits for CSG and CRDS (IRS LB&I Practice Unit, "French Foreign Tax Credits").

Can I use French tax to offset the 3.8% Net Investment Income Tax?

No, following the Federal Circuit's August 31, 2026 decision in Christensen v. United States, which held that the treaty credit does not apply against the NIIT. (KPMG and PwC summaries of the decision.)

Do I have to pay U.S. Social Security tax as a self-employed person in France?

Generally not, if you work only in France: the SSA states that self-employed workers who work only in France are assigned French coverage under the totalization agreement. Keep proof of French coverage; without it, U.S. self-employment tax may apply even if you claim the FEIE (Publication 54).

When to hire a professional

Consult a cross-border adviser qualified in both U.S. and French tax (for example, a U.S. CPA or enrolled agent working with a French expert-comptable or avocat fiscaliste) if any of the following apply:

• You hold or plan to buy French funds, an assurance-vie, a PEA or a PER.
• You are self-employed, own a French company (SAS, SARL, SCI) or a U.S. LLC.
• You have U.S. stock options, RSUs or a deferred-compensation plan.
• You are married to a non-U.S. citizen, or are considering the election to treat a spouse as a U.S. resident.
• You receive gifts or inheritances from French relatives, or are planning your estate (the separate U.S.–France estate and gift tax treaty applies).
• You have unfiled returns or FBARs (see our guide on Streamlined Filing Compliance Procedures if that applies to you).
• You are considering renouncing U.S. citizenship — see our guide on the US exit tax (§877A) (Form 8854; the ten-year treaty rule is in Article 29(2)).

Sources

Source	URL	Used for	Date of page
U.S.–France Income Tax Convention (1994), IRS treaty PDF	https://www.irs.gov/pub/irs-trty/france.pdf	Arts. 2, 4, 10–13, 15, 18 (original), 19, 23, 24, 29	Signed Aug. 31, 1994
Protocol amending the Convention (signed Dec. 8, 2004), Treasury	https://home.treasury.gov/system/files/131/Treaty-France-Protocol-8-12-2004.pdf	New Art. 18; Art. 29(2)–(3) as amended; Art. 24 changes	Dec. 8, 2004
Treasury Technical Explanation of the 2004 Protocol	https://home.treasury.gov/system/files/131/Treaty-France-Protocol-TE-8-12-2004.pdf	Art. 18 interpretation, Roth IRAs, saving-clause interaction, FCP treatment	2004 (listed by Treasury as Aug. 12, 2004)
Treasury Technical Explanation of the 1994 Convention (IRS-hosted)	https://www.eitc.irs.gov/pub/irs-trty/francetech.pdf	Saving clause and Art. 24 overview (excerpt only)	1994–1995
Treasury Technical Explanation of the 2009 Protocol	https://home.treasury.gov/system/files/131/Treaty-France-Pr2-TE-1-13-2009.pdf	Existence and scope of 2009 Protocol	Jan. 13, 2009
U.S. Senate Executive Report 111-1	https://www.foreign.senate.gov/publications/download/executive-report-111-1-executive-report-amending-us-france-tax-convention	2009 Protocol changes (dividends, LOB, arbitration)	2009
Treasury — Treaties and related documents	https://home.treasury.gov/policy-issues/tax-policy/treaties	List of France protocols, TEs and estate/gift protocol	Accessed Oct. 8, 2026
IRS news release IR-2025-103	https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill	2026 FEIE, brackets, standard deduction, spousal gift exclusion	Oct. 9, 2025
IRS Publication 54	https://www.irs.gov/publications/p54	Worldwide taxation, filing deadlines, extensions, SE tax, totalization, forms list, passport rule, spouse election	Revised Dec. 2025
Instructions for Form 2555 (2025)	https://www.irs.gov/instructions/i2555	FEIE tests, stacking, ACTC/EIC bar, revocation, FTC disallowance, housing notice	Last reviewed Apr. 30, 2026
Instructions for Form 8621 (12/2025)	https://www.irs.gov/instructions/i8621	PFIC definition, section 1291 regime, elections, $25,000/$50,000 exception, IRA exception	Last reviewed Apr. 30, 2026
IRS — Comparison of Form 8938 and FBAR requirements	https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements	Thresholds, due dates, penalties, reportable assets	Last reviewed Sept. 19, 2026
IRS — U.S. citizens and residents abroad: Filing requirements	https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-residents-abroad-filing-requirements	FBAR, Form 3520 (foreign pensions as trusts), Rev. Proc. 2020-17	Last reviewed Sept. 28, 2026
IRS LB&I Practice Unit, "French Foreign Tax Credits"	https://www.irs.gov/pub/fatca/int_practice_units/ftc_t_010_01_01.pdf	CSG/CRDS creditability, gross vs. net wages, joint/separate allocation	Revised Aug. 28, 2019
IRS–France FATCA Competent Authority Arrangement	https://www.stayexempt.irs.gov/pub/irs-lbi/frenchrepublic_competent_authority_arrangement.pdf	FATCA IGA signed Nov. 14, 2013	Undated (not visible)
SSA — Totalization Agreement with France	https://www.ssa.gov/international/Agreement_Pamphlets/france.html	Self-employed coverage, certificates SE-404-1/2, health-care caveat, benefits	Certified Nov. 25, 2019
French Senate, written question no. 16147 (1991)	https://www.senat.fr/questions/base/1991/qSEQ910716147.html	Agreement signed Mar. 2, 1987, effective July 1, 1988	July 11, 1991
Service-Public.fr, "Quel est le barème de l'impôt sur le revenu ?"	https://www.service-public.gouv.fr/particuliers/vosdroits/F1419	French income tax scale for 2025 income	Verified Apr. 15, 2026
info.gouv.fr, "Impôt 2026 : quelles nouveautés…"	https://www.info.gouv.fr/actualite/impot-2026-quelles-nouveautes-pour-la-declaration-des-revenus-2025	0.9% indexation; two CSG rates on investment income	Modified Aug. 13, 2026
KPMG GMS Flash Alert 2025-226 (secondary)	https://kpmg.com/xx/en/our-insights/gms-flash-alert/flash-alert-2025-226.html	2026 housing base and cap amounts	Nov. 14, 2025
Tax Notes — LB&I-04-0819-007 directive text (secondary host)	https://www.taxnotes.com/lr/resolve/29vl4	2019 IRS directive on CSG/CRDS	Aug. 2019
KPMG TaxNewsFlash 2026-202 (secondary)	https://kpmg.com/kpmg-us/content/dam/kpmg/taxnewsflash/pdf/2026/08/26202.pdf	Christensen Federal Circuit decision	Aug. 2026
PwC Tax Insight, "Federal Circuit narrows treaty-based FTC relief" (secondary)	https://www.pwc.com/us/en/services/tax/library/federal-circuit-narrows-treaty-based-ftc-relief.html	Date and holding of Christensen	Aug./Sept. 2026

A note on scope: this guide is general information, not tax or legal advice. Which treaty provisions and elections apply to you, how the saving clause and Article 24 interact in your case, and how France treats your specific accounts all depend on your own facts. Get advice from a US preparer experienced with Forms 1116, 8621 and 8938 and a French tax adviser before you rely on anything in this guide.