US Expat Taxes in France: The Complete 2026 Guide

If you are a US citizen or green card holder living in France, you are subject to tax obligations in both countries. The United States taxes its citizens on worldwide income regardless of where they live, and France taxes residents on their worldwide income under a progressive system with rates reaching up to 45%. Without careful planning, you could end up paying tax twice on the same income.

This guide covers everything you need to navigate the intersection of the US and French tax systems: the US-France tax treaty, FBAR and FATCA reporting for French accounts, choosing between the Foreign Tax Credit and the Foreign Earned Income Exclusion, the dangerous PFIC trap with French funds, Social Security coordination, key deadlines, and the most common mistakes expats make.

The US-France Tax Treaty (1994)

The Convention Between the United States and France for the Avoidance of Double Taxation, signed in 1994 and amended by protocol in 2009, is the cornerstone of cross-border tax planning for US expats in France. It determines which country has the primary right to tax specific types of income and provides mechanisms to eliminate double taxation. For a broader overview of how treaties work, see our double taxation treaties guide.

Employment Income (Article 15)

Salary and wages are generally taxed in the country where the work is performed. If you live and work in France, France has the primary taxing right on your employment income. The US also taxes it (because of citizenship-based taxation), but you can claim a Foreign Tax Credit on your US return for French income taxes paid, effectively eliminating double taxation.

Pensions (Article 18)

Private pensions and annuities are generally taxable only in the country of residence. If you live in France and receive a US 401(k) or IRA distribution, France has the primary taxing right. However, US Social Security benefits are taxable only in the country of residence under the treaty, meaning France taxes your Social Security and the US does not (provided you claim treaty benefits on Form 8833).

Dividends and Interest (Articles 10-11)

Dividends from US companies paid to a French resident are subject to a reduced withholding rate of 15% (or 5% for substantial shareholdings above 10%). Interest is generally taxable only in the country of residence. You will need to file a W-8BEN with your US broker to claim these reduced treaty rates.

Capital Gains (Article 13)

Gains from the sale of personal property (stocks, bonds, etc.) are generally taxable only in the country of residence. If you live in France and sell US stocks, France has the primary taxing right. Real estate gains are taxed in the country where the property is located: sell a house in the US and the US taxes the gain; sell an apartment in Paris and France taxes the gain.

Real Estate Income (Article 6)

Rental income from real property is taxable in the country where the property is located. If you own rental property in France, that income is taxable in France first. You then report it on your US return and claim the Foreign Tax Credit for French taxes paid.

FBAR for French Accounts

If the aggregate maximum balance of all your foreign financial accounts exceeds $10,000 at any point during the calendar year, you must file an FBAR (FinCEN Form 114). This threshold is calculated by adding together the highest balance reached in each account during the year, converted to USD at the Treasury Department's year-end exchange rate.

For most US expats in France, this threshold is easily exceeded. The following French account types must be reported:

• Comptes courants (checking accounts) at any French bank (BNP Paribas, Societe Generale, Credit Agricole, La Banque Postale, etc.)
• Livret A and LDDS (Livret de Developpement Durable et Solidaire) — regulated savings accounts. The interest earned is tax-exempt in France but fully taxable on your US return.
• PEL (Plan Epargne Logement) and CEL (Compte Epargne Logement) — housing savings plans that must be reported as foreign financial accounts.
• Assurance Vie (life insurance investment contracts) — these are reportable on the FBAR. They also raise complex US tax questions because they may be classified as foreign trusts or PFICs depending on their structure.
• PEA(Plan d'Epargne en Actions) — French stock savings plans. These are reportable and the underlying funds may be PFICs.

Remember: the FBAR is filed electronically through the BSA E-Filing System, not with your tax return. ExpatFolio tracks your foreign account balances and alerts you when you approach the $10,000 threshold.

FATCA Form 8938: Specified Foreign Financial Assets

In addition to the FBAR, you may also need to file FATCA Form 8938 with your federal tax return. The good news for expats: the thresholds are significantly higher than for domestic filers.

• Single filers living abroad: you must file if your foreign financial assets exceed $200,000 on the last day of the year or $300,000 at any point during the year.
• Married filing jointly living abroad: thresholds are $400,000 on the last day of the year or $600,000 at any point.

Form 8938 covers a broader range of assets than the FBAR. In addition to bank accounts, you must report foreign securities, interests in foreign entities, and financial instruments issued by foreign persons. For France, this includes your Assurance Vie policies, PEA holdings, any shares in French companies (SCI, SAS), and even certain pension rights.

Yes, you may need to file both the FBAR and Form 8938 for the same accounts. They are separate requirements with different filing procedures, thresholds, and penalties.

Foreign Tax Credit vs. Foreign Earned Income Exclusion

US expats have two primary tools to avoid double taxation: the Foreign Tax Credit (FTC) claimed on Form 1116 and the Foreign Earned Income Exclusion (FEIE) claimed on Form 2555. For most Americans living in France, the FTC is the better choice.

Here is why: France's combined marginal tax rates (income tax plus social charges) typically exceed US rates. In 2026, the French income tax brackets range from 11% to 45%, and social contributions (CSG, CRDS, and other charges) add roughly 9.7% on top. When your effective French tax rate exceeds your US effective rate, the FTC eliminates your US tax liability entirely and generates excess credits that can be carried forward for up to 10 years.

The FEIE allows you to exclude up to $130,000 (2026 amount) of foreign earned income. However, it does not help with investment income, and by reducing your US taxable income, it pushes your remaining income into lower brackets — meaning you may lose the benefit of French tax credits that exceed the US tax on that income. In high-tax countries like France, the FTC almost always produces a better outcome.

One important caveat: you cannot use both the FTC and the FEIE on the same income. You can split them (e.g., FEIE on earned income and FTC on investment income), but this requires careful planning and professional advice.

The PFIC Trap: French Funds Are Toxic for US Taxpayers

This is arguably the most costly pitfall for US expats in France. A Passive Foreign Investment Company (PFIC) is any non-US fund where 75% or more of income is passive or 50% or more of assets produce passive income. In practice, virtually all French collective investment vehicles are PFICs:

• OPCVM (Organismes de Placement Collectif en Valeurs Mobilieres)
• SICAV (Societe d'Investissement a Capital Variable)
• FCP (Fonds Commun de Placement)
• Any fund held inside a PEA or Assurance Vie wrapper
• European UCITS ETFs domiciled in Luxembourg, Ireland, or France

The default PFIC tax regime (Section 1291) is punitive. Gains are spread over your holding period and taxed at the highest marginal rate for each year, plus an interest charge. Effective tax rates can exceed 50-70% on PFIC gains. The alternative QEF and mark-to-market elections are complex and require annual reporting on Form 8621 for each PFIC you own.

The simplest solution: do not buy French or European funds. Instead, hold US-domiciled ETFs (such as those from Vanguard, iShares, or Schwab) in a US brokerage account. These are not PFICs and receive favorable US capital gains treatment. ExpatFolio flags any holdings that may be classified as PFICs so you can take action before tax season.

Social Security: The Totalization Agreement

The US and France have a Social Security Totalization Agreement that prevents you from paying social security taxes to both countries simultaneously. The general rule: you pay into the system of the country where you work.

• If you are employed by a French company in France, you pay French social charges (cotisations sociales) and are exempt from US Social Security (FICA) taxes.
• If you are temporarily posted to France by a US employer (for up to 5 years), you can remain in the US system by obtaining a Certificate of Coverage.
• If you are self-employed in France, you pay French social charges and are exempt from US self-employment tax.

The agreement also allows you to combine work credits from both countries to qualify for benefits. If you worked 8 years in the US and 7 years in France, you can combine them to meet the US 10-year (40 credits) minimum for Social Security benefits.

The CSG/CRDS Problem

France's CSG (Contribution Sociale Generalisee) and CRDS (Contribution au Remboursement de la Dette Sociale) are social charges levied on most types of income, including investment income and capital gains. The combined rate is 17.2% on investment income. The IRS has historically taken the position that CSG/CRDS on investment income are not creditable as foreign taxes because they are social taxes rather than income taxes. However, the 2019 Eshel v. Commissioner case and subsequent IRS guidance have created some uncertainty. Many tax practitioners now argue that at least a portion is creditable. This is an area where professional advice is essential.

Key Deadlines

• April 15: Standard US tax filing deadline. If you owe tax, payment is due by this date regardless of extensions.
• June 15: Automatic 2-month extension for US citizens and resident aliens living abroad. No form required, but you must attach a statement to your return explaining you qualify. Interest still accrues from April 15.
• October 15: Extended deadline if you file Form 4868 (automatic 6-month extension from April 15). Most expats use this deadline.
• April 15 (FBAR): The FBAR deadline is April 15 with an automatic extension to October 15. No form is needed for the extension.
• Late May/June: French income tax declaration deadline (declaration des revenus). The exact date varies by department and filing method.

Common Mistakes US Expats Make in France

• Not filing a US return at all: Some expats assume that living abroad exempts them from US filing. It does not. You must file if your income exceeds the standard filing thresholds, regardless of where you live.
• Forgetting the FBAR: Even a single French checking account can push you over the $10,000 threshold when combined with other accounts. Penalties for non-willful failure to file can reach $10,000 per violation.
• Investing in French funds: Opening a PEA or buying OPCVM/SICAV funds seems natural when living in France, but the PFIC consequences are severe. Stick to US-domiciled ETFs.
• Using the FEIE instead of the FTC: In a high-tax country like France, the Foreign Earned Income Exclusion often leaves money on the table compared to the Foreign Tax Credit.
• Ignoring Assurance Vie reporting: French Assurance Vie contracts must be reported on the FBAR, and potentially on Form 8938, Form 3520/3520-A (if classified as a foreign trust), and Form 8621 (if it holds PFICs). Failure to report can trigger penalties on multiple fronts.
• Not reporting French bank interest: Interest from a Livret A is tax-exempt in France but taxable on your US return. Many expats overlook this.
• Missing the CSG/CRDS credit question: If your tax preparer automatically claims CSG/CRDS as a foreign tax credit without analyzing whether it qualifies, you could face IRS scrutiny.
• Not coordinating French and US filings: Because France taxes on a household basis (quotient familial) and the US taxes individually, timing and coordination between your French and US returns matters. File your French return first, then use the final French tax figures for your US Foreign Tax Credit calculation.

Navigating the US-France tax landscape is complex, but with the right structure it is entirely manageable. Keep your investments in US-domiciled funds, track your foreign accounts carefully for FBAR and FATCA compliance, use the Foreign Tax Credit to offset double taxation, and work with a cross-border tax professional who understands both systems. For a broader perspective on managing your finances as an expat, see our managing finances abroad guide.