How the IRS Treats Central Provident Fund (CPF): US Tax Rules for American Expats in Singapore

According to official IRS guidance, the IRS treats your Central Provident Fund (CPF) as a regular foreign retirement account, not as a tax-deferred pension like a 401(k). This means CPF contributions are taxable as income, but growth and distributions follow rules that often work in your favor.

The bottom line: CPF contributions don’t qualify for the Foreign Earned Income Exclusion, but most Americans in Singapore still end up owing little to no US taxes when they use the Foreign Tax Credit strategically. Singapore’s higher tax rates on CPF income typically generate enough foreign tax credits to eliminate your US tax liability completely.

Is CPF Withdrawal Taxable to the IRS?

Yes, but it’s not as scary as you think. CPF withdrawals are generally taxable as ordinary income to the US, but several factors work in your favor:

• Growth and earnings within your CPF account are taxable as they accrue, similar to a regular investment account. Since Singapore doesn’t have a tax treaty with the US, there’s no special deferral treatment.
• Lump-sum withdrawals at retirement are taxable, but they may qualify for favorable treatment depending on your timing and overall tax situation.
• Employer contributions are treated as additional income in the year they’re made, even though you can’t access the funds immediately.

Does CPF Count as Income for Foreign Earned Income Exclusion?

CPF contributions don’t count as qualifying income for the Foreign Earned Income Exclusion (FEIE). This is one of the most important distinctions for US expats in Singapore.

The IRS excludes CPF contributions from qualifying income because they’re considered employer-provided benefits rather than direct wages. This means:

• You can’t use the $130,000 FEIE exclusion (2025 tax year) to exclude CPF contributions
• Your salary still qualifies for FEIE if you meet the physical presence or bona fide residence tests
• CPF must be handled separately using other tax strategies

Example: Sarah earns $100,000 in salary plus $20,000 in CPF contributions. She can exclude the $100,000 salary using FEIE, but the $20,000 CPF contribution is still taxable and needs different treatment.

How Do I Report CPF on US Tax Forms?

CPF reporting involves multiple forms depending on your account value and activity:

Form 8938 (FATCA Reporting)

Required when: Your CPF account value exceeds $200,000 (single) or $400,000 (married filing jointly) on the last day of the tax year, OR exceeds $300,000/$600,000 at any time during the year.

CPF accounts must be reported as foreign financial accounts on Form 8938, including:

• Account number and financial institution details
• Maximum account value during the year
• Income earned in the account

FBAR (FinCEN Form 114)

Required when: Your total foreign financial accounts (including CPF) exceed $10,000 at any time during the year.

File separately from your tax return by April 15 (automatic extension to October 15). Learn more about FBAR requirements.

Form 3520/3520-A

Generally not required for standard CPF accounts, but may apply if you have complex trust arrangements or employer-sponsored pension plans beyond basic CPF.

What’s the Best Tax Strategy for CPF?

Most Americans in Singapore use the Foreign Tax Credit. Here’s why this strategy typically works better than FEIE:

Singapore’s Higher Tax Rates Work in Your Favor

Singapore’s tax rates often exceed what you’d owe to the US, especially on higher incomes:

• Singapore rates: 0% to 24% (2025)
• US rates: 10% to 37% (2025)

Real Example:

• CPF contribution: $25,000
• Singapore tax paid on this amount: $5,000
• US tax owed: $5,500
• Foreign Tax Credit: $5,000
• Net US tax owed: $500

When FEIE Makes More Sense

If you’re in Singapore’s lower tax brackets and have significant CPF contributions, combining strategies might work:

• Use FEIE for salary income up to $130,000
• Use Foreign Tax Credit for CPF contributions and any excess salary

Combined Strategy Example:

• Salary: $120,000 (excluded via FEIE)
• CPF: $24,000 (Foreign Tax Credit applied)
• Result: $0 US tax owed

Is CPF Tax Deductible in Singapore?

Yes, CPF contributions are tax-deductible in Singapore up to annual limits, which creates a tax credit opportunity for Americans.

For 2025, Singapore allows:

• Employee CPF contributions: Fully deductible
• Voluntary contributions: Up to $37,740 for those under 55
• Top-up contributions to family members: Additional deduction limits apply

This Singapore tax deduction generates the foreign taxes paid that you can then credit against your US tax liability using Form 1116.

What If I’m Behind on Filing?

Don’t panic. The IRS offers streamlined procedures for expats, and CPF reporting issues are common and manageable.

Streamlined Procedures Benefits:

• Reduced penalties (often $0 for most expats)
• Can catch up 3 years of tax returns and 6 years of FBARs
• No criminal penalties for good-faith compliance efforts

Common CPF Filing Mistakes We Fix:

• Failing to report CPF on Form 8938
• Not claiming available Foreign Tax Credits
• Missing FBAR requirements
• Incorrectly trying to exclude CPF under FEIE

Time Sensitivity: The longer you wait, the more complicated catch-up becomes. But it’s never too late to get compliant.

CPF Planning for Different Expat Situations

Corporate Expats

If your employer provides CPF matching or housing allowances, these complicate your tax picture but often increase your available foreign tax credits. Track all Singapore taxes paid on employer benefits.

Entrepreneur Expats

Self-employed Americans in Singapore face both CPF obligations and self-employment tax considerations. Strategic planning can help optimize both systems.

Late Filers

If you haven’t filed in years, CPF accounts increase your foreign asset reporting requirements but also provide additional foreign tax credits to offset US liability.

Soon-to-Be Expats

Before moving to Singapore, know that CPF is mandatory for most employees and plan your tax strategy accordingly. Early planning prevents costly mistakes.

Common CPF Tax Mistakes to Avoid

Mistake #1: Assuming CPF is tax-free because it’s a retirement account

Reality: CPF is taxable to the US as a regular investment account

Mistake #2: Trying to exclude CPF contributions under FEIE

Reality: CPF doesn’t qualify for FEIE exclusion

Mistake #3: Forgetting FBAR and Form 8938 reporting

Reality: CPF counts toward foreign account thresholds

Mistake #4: Not claiming Foreign Tax Credits for Singapore taxes paid

Reality: This is usually your best strategy for eliminating the US tax

Mistake #5: Filing late and assuming huge penalties are inevitable

Reality: Streamlined procedures offer penalty relief for expats

Your Next Steps

• If you’re current with filing, calculate whether Foreign Tax Credit or FEIE provides better results for your specific situation. Most Singapore expats benefit from the Foreign Tax Credit on CPF income.
• If you’re behind on filing, the streamlined procedures can help you catch up with minimal penalties. Don’t let another year pass.
• If you’re moving to Singapore, start planning your tax strategy before establishing CPF accounts. Early planning saves money and stress.

Contact us, and one of our customer champions will gladly help. If you need specific advice on your tax situation, click below to get a consultation with one of our expat tax experts.

This article provides general information about US tax treatment of CPF accounts and should not be considered specific tax advice. Tax situations vary based on individual circumstances. Consult with a qualified tax professional for advice specific to your situation.