Guide to U.S. Expat Taxes in France
7 min read
October 26, 2022
October 26, 2022
At a glance
Whether you prefer the vibrant art and culture of Paris or the idyllic calm of the French countryside, it’s easy…
Whether you prefer the vibrant art and culture of Paris or the idyllic calm of the French countryside, it’s easy to fall in love with France — which is why it’s such a popular destination for U.S. expats. With something for everybody, France is an excellent choice for Americans seeking a new life abroad, as long as they stay up to date on their U.S. taxes.
Below, we’ll dive into the basics of U.S. taxes for American citizens living abroad so you can stay on top of your tax obligation. Ready to file your U.S. taxes from France? Whether you file expat taxes yourself with our online expat tax service designed specifically for U.S. citizens abroad or file with an advisor, H&R Block is here to help.
How U.S. taxes work for Americans living in France
Here’s how taxes for Americans living in France work: As long as you’re legally considered a U.S. citizen or Green Card holder, you have a tax obligation to the United States. The reason for this is that the U.S. has a tax system based on citizenship, not place of residency. That means it doesn’t matter if you live in Philadelphia or Paris—if you’re legally considered an American, you file U.S. taxes.
Taxable foreign income for Americans living in France includes:
- Rental Income
- Qualified retirement account distributions
If you have French financial accounts (like bank accounts) or assets, you may need to report them. The U.S. requires citizens to disclose French financial accounts that held $10,000 or more at any one time in the year. To do that, you have to file a Foreign Bank Account Report (FBAR). If you have foreign assets with a value greater than $200,000, you may also have to file FATCA Form 8938.
If you’re an American working in France you can lower your U.S. tax bill and avoid U.S./France double taxation with certain tax strategies. The U.S. has options to help prevent double taxation for Americans living overseas, including tax credits, deductions, and income exclusions:
- The Foreign Earned Income Exclusion (FEIE) and Housing Exclusion – The FEIE and housing exclusion allow U.S. citizens in France to exclude up to a certain amount of foreign earned income if they meet certain requirements.
- Foreign Tax Credit – The Foreign Tax Credit allows Americans to claim a dollar-for-dollar credit on French taxes paid if they meet certain requirements. Because you may pay a higher income tax in France than you would in the U.S., this may be a better option to choose than claiming the FEIE.
- Tax treaties – To prevent double taxation, the U.S. has tax treaties with individual countries, including France.
U.S. taxes when retiring in France
If retiring to a cozy French cottage in the countryside is your retirement goal, you should first understand how taxes work when retiring abroad:
- Even if you retire in France, you still may have to file a U.S. tax return
- You’ll still have to report money in any French financial accounts on your FBAR if you meet the requirements
- If you have a French pension or retirement account (like the compulsory supplementary pension scheme ARRCO-AGIRC), it may be treated differently than in the U.S.
The U.S./France tax treaty and French retirement plans (French pensions)
The U.S. and France have a tax treaty that details specific tax situations between the two countries. While the U.S. has these treaties with a number of countries, the one with France is special because it has language detailing how French pensions and retirement accounts should be taxed.
Normally, having a foreign pension or retirement account would trigger a whole host of other reporting. Not so with the U.S.-France tax treaty.
In laymen’s terms, the U.S. and France agreed that social security income will be taxed based on its source, not where the resident lives:
- If you’re a U.S. citizen with a U.S. retirement account (no matter where you live) that money is only taxable in the U.S.
- If you’re a U.S. citizen living in France with a French pension, that pension would only be taxable in France
- If you’re a U.S. citizen with a French pension and you live in the U.S., that pension would still only be taxable in France
We recommend you speak with an Expat Tax Advisor before you dive into these types of taxes on your own — this is complicated stuff, and the France-U.S. tax treaty is one of the more complicated ones.
Basics of French taxes for U.S. citizens
As an American living in France, you may have to pay French taxes. Here at H&R Block, we dedicate our expertise to U.S. taxes. If you have questions specific to your French tax return, it’s best to speak to an expert on local French taxes.
Your French taxes are dependent on your residency status, as is your due date. For residents, your French taxes are due May 18th of the year following the tax year. If you are a resident and are e-filing your return, you must submit it by May 31. For non-residents, which applies to most U.S. expats, French taxes are due June 7th.
Who qualifies as a French resident?
Just because you live in France doesn’t mean you’re considered a French resident. While we recommend you speak with a residency expert, you must have (at least) the following qualifications to be considered a French resident:
- Your primary home is within a territory of France, or if there is no family home the primary residence location is within French territory
- Your main abode is in France and you spend over 183 days within France
- You must have your primary employment be in France
- Your center of activity for economic purposes must be in France
Again, residency and taxes in France are complicated subjects, and we recommend you speak with a French residency expert before starting your U.S./France taxes.
French income tax rates for U.S. expats
There are two sets of income tax rates in France: One for residents and one for non-residents. French residents are taxed on worldwide income. Americans living in France who are not considered residents for tax purposes are only taxed on income from French sources. Because France has a high income tax rate, it may make sense for you to look into applying the Foreign Tax Credit instead of the Foreign Earned Income Exclusion. When you file with an advisor, they can help walk you through your options.
2021 (2020 Tax Year) French Tax Rates for Americans who Qualify as Residents
|Earnings in Euro (EUR)||Rate Applicable to Income Level (%)|
|Up to €10,084||0%|
|€10,085 – €25,710||11%|
|€25,711 – €73,516||30%|
|€73,517 – €158,122||41%|
2021 (2020 Tax Year) French Tax Rates for Americans who Are Non-Residents
|Earnings in Euro (EUR)||Rate Applicable to Income Level (%)|
|Up to €14,988||0%|
|€14,988 – €43,477||12%|
How to file U.S. taxes from France
With H&R Block, you have two options to file expat taxes from France: With you in the driver’s seat using our DIY online expat tax service (designed specifically for expats), or by letting one of our experienced Expat Tax Advisors take the wheel. No matter which journey you choose, you get the 100% Accuracy Guarantee from H&R Block.
Here’s how to file your U.S. expat taxes from France:
- Head on over to our Ways to File page
- Pick your journey—in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
- Once you’re through your chosen journey, you review your return and pay
- We file your return with the IRS
- You sit back knowing your taxes were done right
When it comes to U.S. taxes for Americans living in France, Block has your back.
If you’re an American living in France, tax returns likely aren’t at the forefront of your mind until it’s time to file. Luckily for you, our expat tax services are tailored for Americans abroad, making the process simple and your tax season stress-free.
Start your U.S./France expat taxes for free today!
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