🇫🇷2026 Tax Guide

US Expat Tax Preparation for Americans in France

Enrolled Agent-prepared US tax returns for Americans living in France — Paris, Lyon, Bordeaux, Nice, and beyond. We coordinate with your French expert-comptable so your IRS and DGFiP filings tell one consistent story for tax year 2026.

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Tax Treaty

Since 1994

Local Tax Rate

0-45% impot sur le revenu (progressive) + 3-4% high-income surcharge; 30% PFU flat tax on capital income (12.8% income tax + 17.2% CSG/CRDS social charges); 20% standard TVA

Filing Deadline

US: April 15 (payment), June 15 (automatic expat extension), October 15 (with Form 4868; FBAR too). France: declaration des revenus due in May-June depending on department.

US-France Tax Relationship

The US-France income tax treaty (signed 1994, in force 1995, updated by the 2004 and 2009 protocols) is one of the more generous the US maintains with a high-tax country. It allocates taxing rights: employment income is generally taxed where the work is performed, portfolio dividend withholding is capped at 15%, and interest and most royalties are taxed at 0% at source. Two features stand out. Under Article 18, US Social Security paid to a US citizen resident in France is taxable only in France — a genuine exception to the saving clause. And Article 24 relief is unusually broad: France grants a credit equal to the US tax on certain US-source income of Americans resident in France, so that income is relieved of French double taxation rather than taxed twice. The saving clause (Article 29) still lets the US tax its own citizens as if the treaty did not exist, with listed exceptions, so for most Americans the treaty orders the two systems rather than cutting the IRS bill outright. Because France's combined rates (impot sur le revenu up to 45%, the high-income surcharge, and now-creditable 17.2% CSG/CRDS social charges) exceed US rates at most income levels, the Foreign Tax Credit typically eliminates US tax and builds a carryforward. The separate 1987 Totalization Agreement prevents dual social security contributions and lets a self-employed American escape the 15.3% US self-employment tax.

Key Tax Considerations for France

FEIE vs Foreign Tax Credit — the FTC usually wins in France

French marginal rates reach 45% before the high-income surcharge, and with creditable CSG/CRDS social charges the effective rate often exceeds the US rate. The Foreign Tax Credit (Form 1116) therefore beats the Foreign Earned Income Exclusion for most Americans in France: French tax paid wipes out the US liability and leaves an excess-credit carryforward good for ten years. The FTC also preserves the refundable Additional Child Tax Credit (up to $1,700 per child in 2026), which the FEIE forfeits. The FEIE can still win in the first partial year abroad or at lower incomes — we model both before filing.

CSG and CRDS are now creditable — recover the credit

For years the IRS denied a credit for CSG and CRDS, calling them social security taxes. The 2019 US-France joint memorandum reversed that: these social charges are now creditable foreign income taxes on Form 1116. On investment income, social charges reach 17.2%, so this is real money. We capture CSG and CRDS in the correct Form 1116 baskets and, where you overpaid US tax in earlier open years because the credit was denied, evaluate amended or protective refund claims.

Assurance-vie is a US reporting minefield

France's favorite savings wrapper is one of America's worst traps. An assurance-vie holding unites de compte holds PFIC funds (Form 8621); depending on structure the contract can be a foreign grantor trust (Forms 3520/3520-A) or foreign life insurance subject to the 1% excise tax on premiums (Form 720). Because most contracts fail the US definition of life insurance, inside growth may be currently taxable. We analyze the contract, handle every required form, and advise on whether to keep, restructure, or exit it.

PFIC trap in French funds, PEA, and ETFs

Nearly every French SICAV, FCP, or EU UCITS ETF — including those inside a PEA — is a Passive Foreign Investment Company under US law. PFIC taxation is punitive (top ordinary rates plus an interest charge) and each fund needs its own Form 8621. The PEA's French tax-free status is meaningless to the IRS. We identify PFIC exposure, prepare Form 8621, and help you restructure toward US-domiciled ETFs held at a US brokerage.

The IFI wealth tax is not creditable

The impot sur la fortune immobiliere (IFI) taxes net real-estate holdings above 1.3 million euros. Because it is a tax on capital rather than income, it is not creditable on Form 1116 and there is no US wealth tax to offset it. For property-heavy Americans it is a pure additional cost. We flag IFI exposure and coordinate on how ownership and debt are structured, while keeping your US property reporting correct.

Totalization Agreement kills US self-employment tax

For self-employed Americans — micro-entrepreneur or profession liberale — a French certificate of coverage under the 1987 US-France Totalization Agreement exempts you from the 15.3% US self-employment tax, usually the single largest saving available. The agreement also prevents dual social security contributions for employees and totalizes credits toward benefits in both systems. CSG and CRDS are separate and remain creditable income taxes.

US Social Security is taxed only in France

Under Article 18 of the treaty, US Social Security paid to a US citizen resident in France is taxable only in France — a real exception to the saving clause. This changes how retiree returns are prepared, since France taxes the benefit and the US relieves it. We apply the treaty position correctly, file Form 8833 where required, and coordinate the sequencing of US and French returns for retirees drawing cross-border pensions.

FBAR & FATCA on French accounts

All French financial accounts — compte courant, Livret A, LDDS, PEA, assurance-vie, and brokerage compte-titres — count toward the $10,000 FBAR threshold. France reports US-person accounts under its FATCA agreement, so French banks will ask you for a W-9. Form 8938 thresholds for residents abroad are $200,000 (year-end) / $300,000 (any time). We prepare FBAR and Form 8938 alongside your return.

Married to a French (non-US) spouse or in a PACS

France taxes the household jointly via the quotient familial, but the US does not follow that. If your spouse is French with no US status, you will usually file married filing separately — which drops the US filing threshold to just $5 of income — or elect to treat your spouse as a US resident, a decision with real trade-offs. A PACS is not automatically a marriage for US purposes. We run the comparison and handle the ITIN process where needed.

Required US Tax Forms

Form 1040

US Individual Tax Return

Required for all US citizens and green card holders regardless of residence. Reports worldwide income — French salary, self-employment, investment, and rental income — converted to USD.

Form 1116

Foreign Tax Credit

Claims dollar-for-dollar credit for French income tax, the high-income surcharge, and — since the 2019 memorandum — CSG and CRDS social charges. Given France's high rates, most Americans generate excess FTC that carries forward ten years.

Threshold: Dollar-for-dollar credit up to US tax on foreign income

Form 2555

Foreign Earned Income Exclusion

Excludes up to $132,900 of foreign earned income for 2026. In France the FTC is usually more beneficial, but the FEIE can win in the first partial year or at lower incomes.

Threshold: Up to $132,900 (2026)

FBAR (FinCEN 114)

Foreign Bank Account Report

Reports all French financial accounts — compte courant, Livret A, LDDS, PEA, assurance-vie, and brokerage accounts. Non-willful penalties can exceed $16,000 per account per year.

Threshold: $10,000 aggregate at any point during the year

Form 8938

FATCA Statement of Foreign Financial Assets

Reports specified French financial assets with your Form 1040. Higher thresholds than FBAR for residents abroad.

Threshold: $200,000 (year-end) / $300,000 (any time) for residents abroad

Form 8621

PFIC Annual Information Return

Required for each French or EU fund/ETF held — nearly all are PFICs, including funds inside a PEA or assurance-vie. Each fund needs a separate form; default Section 1291 treatment is punitive.

Threshold: Any ownership in a French/EU investment fund

Form 8833

Treaty-Based Return Position Disclosure

Required when relying on the US-France treaty to modify US tax — including the Article 18 US Social Security position and certain Article 24 relief positions.

Threshold: Any treaty-based position that affects US tax

Form 3520 / 3520-A

Foreign Trust Reporting

May apply to assurance-vie contracts and certain French retirement or insurance structures when the IRS treats them as foreign trusts. A related Form 720 excise filing can apply to foreign life-insurance premiums.

Threshold: Ownership of or transactions with a foreign trust

Common Expat Scenarios

Software engineer in Paris (75,000 euro salary)

US citizen employed by a Paris tech company, contributing to the French state and AGIRC-ARRCO pensions, with a compte courant, a Livret A, and a broker compte-titres holding a French MSCI World ETF.

Our Approach: File Form 1040 with the Foreign Tax Credit — French income tax plus creditable CSG/CRDS on any investment income far exceeds the US tax, so US liability drops to zero with excess FTC carrying forward. The French ETF is a PFIC requiring Form 8621; we plan a switch to a US-domiciled ETF at a US broker. Report the compte courant, Livret A, and compte-titres on FBAR. The Totalization Agreement covers the pension contributions. Claim the refundable Additional Child Tax Credit if applicable.

American freelancer (profession liberale) in Lyon

Self-employed consultant billing 110,000 euros/year from French and EU clients, registered under the regime reel, contributing to URSSAF.

Our Approach: Obtain a French certificate of coverage under the Totalization Agreement to eliminate the 15.3% US self-employment tax — the biggest single saving. Report profit on Schedule C in USD; French income tax and CSG/CRDS are creditable via Form 1116, reducing US tax to near zero. We advise against forming a SARL or SAS without CFC/GILTI analysis (Form 5471) and keep the French and US pictures consistent.

Dual citizen behind on filings after a FATCA letter

US-born, raised in France, never filed US returns; received a W-9 request from a French bank and panicked. Holds an assurance-vie and a PEA.

Our Approach: Enter the IRS Streamlined Foreign Offshore Procedures: three years of returns, six years of FBARs, and a non-willful certification, with all penalties waived. With the FTC (including CSG/CRDS), back-tax owed is usually zero, and refundable child credits may produce refunds. We untangle the assurance-vie (PFIC/foreign-trust and possible Form 720 excise) and the PEA's PFIC holdings, and prepare the entire package and the Form 14653 certification.

Retiree in Nice drawing US and French pensions

Retired American receiving US Social Security, a US 401(k) distribution, and a small French state pension, with a French assurance-vie for estate planning.

Our Approach: Under Article 18 the US Social Security is taxable only in France, so we apply the treaty position and file Form 8833; the 401(k) is reported on Form 1040 with FTC for French tax. We analyze the assurance-vie for PFIC, foreign-trust, and excise-tax reporting, coordinate withdrawal sequencing, and confirm FBAR coverage of all French accounts.

Remote worker for a US employer living in Bordeaux

US citizen who moved to Bordeaux mid-year and kept a US-payroll job, paid in USD, with a new French bank account and a US brokerage back home.

Our Approach: We handle the move-year part-year allocation, test whether the FEIE physical-presence test straddling two calendar years beats the FTC for the first year, and set up the French filing posture. French tax and social charges on the salary become creditable once France taxes it; we keep US investments in US-domiciled funds to avoid PFIC issues and check state 'sticky' residency for the last US state of domicile.

Tax Advantages

US-France treaty (1994, updated 2004 and 2009) plus the Totalization Agreement provide a strong, and unusually generous, framework against double taxation
CSG and CRDS social charges are now creditable, adding to the Foreign Tax Credit pool that eliminates US tax and carries forward ten years
Article 24 relief and the Article 18 US Social Security carve-out deliver genuine treaty benefits to US citizens, not just theoretical ones
Totalization certificate of coverage exempts self-employed Americans from the 15.3% US self-employment tax
Streamlined Filing lets non-willful non-filers catch up penalty-free — often with zero back tax after the FTC and CSG/CRDS credits
Refundable Additional Child Tax Credit remains available when using the FTC rather than the FEIE

Watch Out For

Assurance-vie contracts trigger PFIC, foreign-trust (Forms 3520/3520-A), and potentially Form 720 excise reporting despite their French popularity
French and EU funds/ETFs — including those inside a PEA — are PFICs requiring Form 8621 at significant annual cost
CSG and CRDS must be captured as creditable income taxes on Form 1116 or the Foreign Tax Credit is understated
The IFI real-estate wealth tax is not creditable and has no US offset, so it is a pure additional cost to plan around
Selling French property tax-favored under the abattements can still trigger US capital gains tax with no offsetting credit, plus phantom Section 988 currency gain
Marriage to a non-US French spouse or a PACS raises MFS $5 filing threshold and ITIN questions, and the quotient familial does not carry to the US
Mismatched deadlines (US April/June/October vs French spring declaration) complicate FTC accrual timing across the two systems

Frequently Asked Questions

Do I still have to file US taxes while living in France?

Yes. US citizens and green card holders file Form 1040 every year on worldwide income no matter where they live. Filing rarely means paying, though — because French taxes are high, the Foreign Tax Credit or the Foreign Earned Income Exclusion (up to $132,900 for 2026) usually reduces the US bill to zero. The mandatory part is the paperwork, including FBAR and Form 8938, where the penalties for skipping the information forms are far harsher than anything tied to the tax itself.

Can I really credit CSG and CRDS now?

Yes. The 2019 US-France joint memorandum settled that CSG and CRDS are not social security contributions covered by the Totalization Agreement, so the IRS treats them as creditable foreign income taxes on Form 1116. On investment income, social charges reach 17.2%, so the credit is significant. If you paid US tax in an earlier open year because the credit was denied, you may be able to file an amended or protective refund claim. We capture CSG and CRDS in the correct baskets and evaluate refunds where they apply.

Why is my assurance-vie such a US tax problem?

Assurance-vie is France's favorite savings wrapper, but the IRS ignores its French benefits and applies harsh rules. If it holds unites de compte, those funds are PFICs (Form 8621). Depending on structure, the contract can be a foreign grantor trust (Forms 3520/3520-A) or foreign life insurance subject to the 1% excise tax on premiums (Form 720), and its inside growth may be currently taxable because it does not meet the US definition of life insurance. We analyze your contract, prepare every required form, and advise whether to keep, restructure, or exit it.

Should I use the FEIE or the Foreign Tax Credit in France?

For most Americans in France, the Foreign Tax Credit is better. French marginal rates reach 45% before the high-income surcharge, and with creditable CSG/CRDS the effective rate often exceeds the US rate, so French tax wipes out the US liability and leaves an excess-credit carryforward good for ten years. The FTC also preserves the refundable Additional Child Tax Credit, which the FEIE gives up. The FEIE can still win in your first partial year abroad or at lower incomes — we model both.

Is US Social Security taxed by the US if I live in France?

No — under Article 18 of the treaty, US Social Security paid to a US citizen resident in France is taxable only in France. This is one of the genuine exceptions to the treaty's saving clause, so France taxes the benefit and the US relieves it. It is an unusually favorable result. Because the interaction with French tax and the saving clause is nuanced, we confirm the treatment for your facts, file Form 8833 where required, and coordinate the US and French returns.

Are my PEA and Livret A tax-free for US purposes?

No. The PEA and Livret A are tax-free in France, but the US recognizes neither shelter. The PEA usually holds French/EU funds that are PFICs, and its gains are US-taxable when realized; Livret A interest is fully US-taxable. Both must be reported on the FBAR and, above the thresholds, on Form 8938, despite generating no French tax. Most Americans are better off holding US-domiciled ETFs through a US brokerage than relying on these French wrappers.

I'm self-employed in France — do I owe US self-employment tax too?

Not if you obtain a French certificate of coverage under the US-France Totalization Agreement. It exempts you from the 15.3% US self-employment tax because you contribute to the French system instead. This is usually the single largest saving available to American freelancers in France, so it is step one when we take on a self-employed client. Your French income tax and CSG/CRDS remain creditable on Form 1116, which typically reduces US income tax to near zero.

Will I be double-taxed on my French salary?

Almost never, if the return is prepared correctly. The US-France treaty and the Foreign Tax Credit are designed to prevent it: France taxes your salary first, and the US grants a credit for the French income tax and creditable social charges, which typically covers the entire US liability. Double taxation usually only creeps in through mismatched items like PFIC funds, assurance-vie, or the IFI wealth tax — which is exactly what specialist preparation is for.

Do you coordinate with my French expert-comptable?

Yes. Because the French tax you pay drives your US Foreign Tax Credit, the two returns need to tell one consistent story. We work directly with your expert-comptable on timing, figures, and treaty positions, and we sequence the filings so the French return informs the US one. If you do not have a French adviser yet, we can point you to the French side and make sure nothing — including CSG/CRDS and assurance-vie — falls between the two systems.