For an American living in France, taxes usually mean two returns a year, but the same income is rarely taxed twice.
The US taxes you as a citizen wherever you live, and credits the French income tax you pay against its own. France’s income tax scale runs from 0% to 45%, and most professionals land in its 30% or 41% band.
Updated · Sources
An American resident in France
- 41%
- is France’s income tax rate on net taxable income from €84,578 to €181,917 per household share.
- 31.4%
- is France’s flat levy on dividends, interest and securities gains, of which 12.8% is income tax.
- $0
- is the French income tax on US Social Security and on 401(k) or IRA payouts.
Income tax bands are for 2025 income, taxed in 2026. The 31.4% applies to securities gains from 2025, and to dividends and interest from 2026.
What does an American in France file each year?
You are American, or hold a green card
A US return is due for any year your gross income, including pay you exclude, reaches the filing threshold. You claim the credit for French tax on Form 1116, and the exclusion on Form 2555. France has you filing twice, and the US return waits until June 15, though interest on any tax due starts April 15.
You are resident in France
France taxes you as a resident, so you also file a French return each spring. For 2025 income, the online deadline was May 21, May 28 or June 4, 2026, depending on your département.
Your accounts outside the US top $10,000
You file an FBAR once the highest balances of your foreign accounts add up to more than $10,000. It lists every account and goes to FinCEN, separately from your tax return. It is due April 15, and extends automatically to October 15.
Your foreign assets top $200,000
Form 8938 reports your foreign financial assets and goes with your tax return. Living abroad raises its thresholds. A single filer abroad files it once those assets top $200,000 on December 31, or $300,000 on any day. The joint return figures are $400,000 and $600,000.
Many Americans in France must file both the FBAR and Form 8938. Neither replaces the other, and each covers some assets the other does not.
A $10,000 IRA payout leaves $2,400 of US tax, while $10,000 of French pay leaves none.
French salary
$0
French income tax on this pay tops the $2,400 of US tax, so the credit clears it. The French tax left over carries to other years.
French social security pension
$0
Only France may tax it, even when it is paid to a US citizen.
Interest from a French bank
Up to $1,120
France’s 12.8% flat income tax, or $1,280, is credited against the $2,400, leaving up to $1,120. Whether France’s social contributions on it can be credited too is disputed.
IRA or 401(k) payout
$2,400
The treaty lets only the US tax it, so there is no French tax to credit.
Each figure is the US tax left on $10,000 at 24%, or $2,400, after any French tax is credited. France taxes pay net of deductible social contributions and a standard deduction for work costs. Even on that smaller base, its 41% band takes more than $2,400 of the $10,000. France’s social contributions on pay, the CSG and CRDS, face the same dispute over the US credit as those on interest. Article 18(1) of the treaty decides who taxes both pensions, and it binds the US even for its citizens. The payout comes from a traditional account with no after-tax basis, taken after age 59½, so it is taxed in full.
For most Americans on a French salary, the credit works better than the exclusion.
On French pay, the foreign tax credit usually beats the foreign earned income exclusion. French income tax tends to top the US tax on that pay. Either one can leave no US tax on a French salary. They differ on what happens to the French tax left over, and on pay the exclusion cannot cover. The figures are for 2026.
| The credit | The exclusion | |
|---|---|---|
| French tax above the US tax | Carried to other years 1 year back, then 10 forward | Lost on excluded pay |
| Pay above $132,900 | Credited like the rest | Taxed at the rates it would face without the exclusion Credit only for its share of French tax |
| Your first year in France | No test to pass | Prorated by day $364.11 a day in 2026, once you pass the bona fide residence or physical presence test |
| Housing in Paris | No extra relief | Up to $52,336 more excluded A $73,600 cap, less a $21,264 base |
| Changing your mind | Chosen each year | Revoking bars it for 5 years Unless the IRS consents |
France’s family quotient splits household income into shares by family size, so marriage and children change your French band. A lower band means less French tax to credit, so run your figures both ways before you elect the exclusion.
Where Americans in France go wrong on the US return.
Expecting Germany’s rule on Social Security
The US taxes US Social Security paid to an American in France, as it would at home, and France does not. The German and UK treaties work the other way, giving that benefit to the country you live in.
Buying French funds
US tax law treats most French mutual funds and ETFs as passive foreign investment companies (PFICs). PFIC shares carry their own US tax rules, and usually a Form 8621 for each fund.
Forgetting that an assurance-vie is a foreign account
An assurance-vie is a French life insurance policy, and one with a cash value goes on your FBAR. No treaty article defers US tax on it, or on a PER retirement plan. The funds inside either may be PFICs.
Expecting a credit for the IFI
The US credit covers only income taxes, so it gives nothing for France’s IFI, a wealth tax on real estate. The IFI taxes net real estate above €800,000 once its value tops €1.3 million on January 1. Financial assets fall outside it.
Relying on the exclusion for self-employment tax
Neither the foreign earned income exclusion nor the foreign tax credit lowers US self-employment tax. A totalization agreement can, and the US-France agreement has been in force since July 1, 1988. It generally has you pay into one country’s social security system. To stop US self-employment tax, you need a French certificate of coverage. Moving your business to France for two years or less keeps you in the US system.
We prepare the US return that sits beside your French one.
We apply the US-France treaty to your US return. We do not prepare French returns or give French tax advice.
- We credit your French income tax on Form 1116, coordinating with whoever files your French return.
- We file your FBAR with every French account on it, and Form 8938 when your assets reach its threshold. Your quote charges per account and per fund.
- We test the exclusion and its Paris housing cap against the credit before you commit to one.
- We figure estimated payments for your US pension income.
- We answer any IRS or state letter about a return we prepared, such as one on your credit for French tax, at no added fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
Five questions about US and French tax for Americans in France.
Do US citizens pay taxes in France?
Yes, US citizens who live in France pay French income tax as residents, on a scale from 0% to 45%. High incomes also pay a surcharge. The US still taxes them as citizens, so they usually file a return in each country. On the US return, the foreign tax credit subtracts French income tax from the US tax on French income. The US-France treaty also leaves US Social Security and US pension payouts to the US alone.
Do Americans living in Europe pay US taxes?
Yes, the US taxes Americans living in Europe on their worldwide income, since its tax follows citizenship and green cards. Americans in Europe must file a US return once gross income reaches the filing threshold, $15,750 for 2025 if single and under 65. In high-tax countries such as France, the foreign tax credit usually leaves little US tax on pay. Treaties differ on Social Security: France leaves it to the US alone, while in Spain both countries may tax it.
What are the tax advantages for American retirees living in France?
The main advantage is that France does not tax US Social Security or US pension payouts. Under Article 18(1) of the US-France treaty, only the US may tax them, including 401(k) and IRA payouts. France may still count that income when setting the rate on your other French income. A French social security pension is the reverse, since only France taxes it, even for a US citizen. An American retiring to Japan gets no such advantage on US Social Security, because Japan and the US can each tax it.
Does the US have a tax treaty with France?
Yes, the US-France income tax treaty was signed on August 31, 1994, and has generally applied since January 1, 1996. Protocols signed in 2004 and 2009 amended it. Article 29(2), its saving clause, lets the US go on taxing its citizens under US law. The clause makes exceptions, so the US still applies Article 18(1) on pensions and Article 24 on credits to its citizens. A separate totalization agreement has coordinated social security since July 1, 1988.
Are taxes higher in France than in the US?
French income tax rates run higher than US rates at most professional incomes. On 2025 income, France charges 30% from €29,580 and 41% from €84,578 of net taxable income per share. A single US filer pays 22% from $50,400 and 24% from $105,700 in 2026. France also charges social contributions on pay, on top of income tax. From 2026, France’s flat levy on dividends and interest is 31.4%.
Sources
- US-France income tax convention (1994)
- Protocol to the US-France convention (2004)
- Protocol to the US-France convention (2009)
- US-Japan income tax convention (2003)
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS, Notice 2026-25, Determination of housing cost amounts eligible for exclusion or deduction for 2026
- IRS, 2025 Form 1040 instructions (filing thresholds)
- Treas. Reg. § 1.6081-5, Extensions of time for filing returns of certain taxpayers
- 26 U.S.C. § 901, Taxes of foreign countries
- 26 U.S.C. § 904, Limitation on credit
- 26 U.S.C. § 911, Citizens or residents of the United States living abroad
- 26 U.S.C. § 1297, Passive foreign investment company
- IRS, Instructions for Form 8621
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- FinCEN, FBAR line item filing instructions
- IRS, Instructions for Form 8938
- Treas. Reg. § 1.6038D-2, Requirement to report specified foreign financial assets
- Social Security Administration, US international social security agreements
- Social Security Administration, US-France social security agreement
- Service-Public.fr, income tax scale for 2025 income (F1419)
- Service-Public.fr, the 10% deduction for work costs (F1989)
- impots.gouv.fr, taxation of securities income (flat levy)
- impots.gouv.fr, what changes in the 2026 income tax return
- Service-Public.fr, real estate wealth tax (IFI) (F138)
- impots.gouv.fr, 2026 income tax return dates
Reviewed and updated September 2026. General information, not advice for your situation.