For American citizens and green card holders, moving to France is not just a change of address — it is a complete transformation of your tax situation. Unlike most countries, the United States taxes its citizens on their worldwide income regardless of where they live or how long they have been resident in France. As an American living in France, you are simultaneously liable to file a US tax return with the IRS and a French tax return with the French tax authorities — making expat tax planning one of the most critical steps before and after your move.
The France-US tax treaty exists to help Americans avoid double taxation and reduce their overall tax burden, but it does not eliminate your US tax obligations. You must still file Form 1040 annually, report all foreign bank accounts via FBAR, comply with FATCA reporting requirements for foreign financial assets, and understand how the Foreign Tax Credit (FTC) and the Foreign Earned Income Exclusion (FEIE) interact with your French income tax liability. Green card holders face the same filing requirements as US citizens — there are no exceptions based on residency status in France.
Whether you are a retiree managing a 401(k) or IRA from Provence, a digital nomad working remotely for a US company, or a family relocating permanently to the French countryside, this complete guide covers everything Americans need to know about US taxes when living in France — from the France-US totalization agreement on social security contributions, to capital gains tax, rental income, wealth tax, and the most common and costly mistakes US expats make when filing their tax returns from abroad.
The fundamental difference: citizenship-based taxation
Most countries tax residents. The United States taxes citizens. This means that as an American living in France, you are simultaneously subject to French income tax as a French tax resident and to US federal income tax as a US citizen. Understanding how these two systems interact — and how to avoid paying twice — is the single most important financial issue you will face as an American expat in France.
You must still file a US tax return every year
No matter how long you have lived in France, you are required to file an annual US federal tax return (Form 1040) with the IRS. You must also file additional forms depending on your situation, including the FBAR (FinCEN 114) if your foreign bank accounts exceed $10,000 in combined value at any point during the year, and FATCA Form 8938 if your foreign financial assets exceed IRS thresholds. Failure to file carries severe penalties — the IRS does not make exceptions for expats who claim they were unaware of their obligations.
The US-France tax treaty
The United States and France have a tax treaty designed to prevent double taxation. Like the UK-France convention, this treaty allocates taxing rights between the two countries by income type — employment income, pensions, dividends, capital gains, and rental income are all covered. However, because the US taxes based on citizenship rather than residency, the treaty's protections are more limited for Americans than for other nationalities. In many cases, Americans must still file in both countries and use the foreign tax credit mechanism to offset French tax paid against their US liability.
The Foreign Earned Income Exclusion (FEIE)
If you work in France, you may be able to exclude a portion of your earned income from US taxation using the Foreign Earned Income Exclusion (FEIE). For 2026, the exclusion amount is approximately $130,000. To qualify, you must meet either the Physical Presence Test (330 days outside the US in a 12-month period) or the Bona Fide Residence Test. Importantly, the FEIE applies only to earned income — it does not cover pensions, Social Security, dividends, rental income, or capital gains.
The Foreign Tax Credit (FTC)
The Foreign Tax Credit allows you to offset French income tax paid against your US tax liability on the same income. For most Americans in France — where tax rates are generally higher than in the US — the FTC is more advantageous than the FEIE, as it can reduce your US tax bill to zero on most income types. The two mechanisms cannot be combined on the same income, so choosing the right approach requires careful planning.
Your 401(k) and IRA when living in France
Your US retirement accounts remain in the US when you move to France, but the tax treatment becomes more complex. Withdrawals from a traditional 401(k) or IRA are subject to US federal income tax regardless of where you live. Whether France also taxes those withdrawals depends on the US-France tax treaty — in most cases, US retirement income is taxable in France as well, with a foreign tax credit applied to avoid full double taxation. Required Minimum Distributions (RMDs) still apply from age 73 regardless of your country of residence.
Roth IRA withdrawals are tax-free in the US, but France does not recognise the Roth tax-free status — meaning qualified Roth withdrawals may be taxable in France as normal investment income. This catches many American expats off guard and is worth addressing before you move.
Social Security when living in France
The US and France have a totalization agreement that prevents double Social Security contributions for people working across both countries. You can generally receive your US Social Security payments while living in France — the SSA sends payments to France without restriction. Up to 85% of your Social Security benefit may be taxable in the US depending on your total income, and France may also tax it under the treaty rules.
FBAR and FATCA: reporting foreign accounts
As an American living in France, you must report all foreign financial accounts annually. The FBAR (FinCEN 114) is required if the combined value of all your foreign accounts exceeds $10,000 at any point during the year. FATCA Form 8938 requires additional reporting for higher-value foreign financial assets. These are reporting requirements, not tax payments — but the penalties for non-compliance are severe, including fines of up to $10,000 per violation and criminal prosecution in extreme cases.
Investments: the PFIC trap
This is one of the most significant financial pitfalls for American expats. Non-US mutual funds, ETFs, SICAVs, and most locally-based investment products are classified as Passive Foreign Investment Companies (PFICs) by the IRS. Owning PFICs triggers punitive tax treatment, annual excess distribution charges, and complex Form 8621 filing requirements. Americans in France should avoid French or European investment funds entirely and stick to US-based brokerage accounts, US ETFs, and US mutual funds wherever possible.
State taxes: an often-overlooked obligation
Some US states continue to tax you even after you move abroad, unless you formally sever all ties before leaving. California, Virginia, South Carolina, and New Mexico are among the strictest. Before moving to France, review your state tax obligations carefully — changing your driver's licence, voter registration, and domicile declaration before departure can make a significant difference.
Renouncing US citizenship
Some long-term American expats in France eventually consider renouncing US citizenship to escape the complexity of lifetime US tax filing. This is a significant and irrevocable decision. It involves a $2,350 fee, a potential exit tax on unrealised gains above a set threshold, and permanent loss of the automatic right to live and work in the United States. It should only be considered after extensive consultation with both a US tax attorney and an immigration lawyer.
The most important steps before you move
Before leaving the US for France, you should consolidate your retirement accounts, choose an expat-friendly US brokerage, review your state tax ties, consider Roth conversions while still in the US if advantageous, prepare for FBAR and FATCA reporting from year one, and obtain specialist cross-border financial advice from an advisor registered with both the SEC and familiar with French tax law.
This article is for informational purposes only and does not constitute financial or tax advice. Always consult a qualified independent advisor before making any decision.
Read also : Finance & Tax for expat in France
Your questions about US taxes for American expat in France
You have sent us several questions about this complex topic. Please find below our answers.
