U.S. Expat Tax Guide for Living in France

According to French government statistics, over 100,000 Americans live in France, drawn by its rich culture, excellent healthcare, and exceptional quality of life. For Americans living in France, despite France’s progressive tax rates reaching up to 45% (and potentially 55.4% with surcharges), most U.S. expats owe $0 in U.S. taxes when filing correctly. Here’s what you need to know about filing taxes in both countries without the stress.

The key to peace of mind is proper planning and filing. While you’ll pay French taxes on your worldwide income as a French resident, the U.S.-France tax treaty, combined with the Foreign Tax Credit and Foreign Earned Income Exclusion, typically eliminates any U.S. tax liability. The challenge isn’t paying double taxes—it’s filing correctly in both countries.

Why Do I Have to File Taxes in Both Countries?

As a U.S. citizen, you’re required to file U.S. taxes regardless of where you live. The United States is one of only two countries in the world that taxes based on citizenship rather than residence. At the same time, if you’re a French tax resident, you must file French taxes on your worldwide income.

Here’s how it works:

You file a French tax return reporting all income and paying French federal taxes. Then you file your U.S. Form 1040, also reporting worldwide income, but applying exclusions and credits that typically reduce your U.S. tax bill to $0.

The U.S.-France tax treaty prevents true double taxation by coordinating between the two systems. Most Americans in France end up owing nothing to the IRS thanks to these protections.

Take Note

Don’t skip your U.S. filing just because you owe $0. Failing to file can result in penalties, even if no tax is due.

Living in France and unsure how to handle both tax systems?

French tax rates are high, which means most Americans in France owe $0 to the IRS when filings are done properly. Our accountants prepare your US return with the right credits and exclusions so everything aligns with your French obligations.

Am I a French Tax Resident?

French tax residency determines whether you are required to file taxes on your worldwide income or just French-source income. France uses clear criteria to determine tax residency.

You’re generally a French tax resident if you meet any of these conditions:

Primary residence: Your main home (foyer) is located in France
Center of economic interests: The majority of your professional activities or investments are in France
Principal employment location: Your main professional activity is in France
Physical presence: You spend 183 days or more in France during the tax year (even with interruptions)

Example: Tom’s Move to Paris

Tom, a software engineer, moved from San Francisco to Paris on August 1, 2025. By year-end, he spent 153 days in France. Under French tax law, he’s not automatically a resident based on the 183-day test. However, because his apartment in Paris is his primary home and his center of economic interests shifted to France (new job, French bank accounts, French health insurance), he qualifies as a French tax resident for 2025.

How Do France and the U.S. Tax Systems Compare?

Understanding the differences helps you plan more effectively and avoid surprises.

Tax Category	France	United States
Federal/National Income Tax	0% to 45% (progressive)	10% to 37%
State/Local Tax	No additional state taxes	0% to 13.3% (varies by state)
High-Income Surtaxes	3% on income above €250K (single) 4% on income above €500K (single)	Net Investment Income Tax 3.8%
Combined Top Rate	Up to 55.4% (with surtaxes)	Up to 50.3% (federal + state)
Social Charges (CSG/CRDS)	9.7% (CSG) + 0.5% (CRDS) Applies to most income types	FICA: 7.65% (6.2% SS + 1.45% Medicare) No cap on Medicare
Value-Added Tax	20% standard rate (5.5%-10% reduced)	No VAT; state sales tax 0-10.75%
Healthcare	Universal healthcare via social charges	Not included; separate insurance required
Capital Gains (Real Estate)	19% + 17.2% social charges. Exemptions for long ownership	0% to 20% federal + 3.8% NIIT Plus state taxes
Wealth Tax (IFI)	0.5% to 1.5% on real estate over €1.3M	No wealth tax
Tax Year	January 1 – December 31	January 1 – December 31
Filing Deadline	May 31 (June for online filing)	April 15 (June 15 automatic for expats)

Key Difference for Expats: While French rates appear higher, the higher taxes you pay to France typically eliminate your U.S. tax liability through the Foreign Tax Credit. Most Americans in France owe $0 to the IRS.

How Do I File My French Tax Return?

French tax filing is now primarily done online through the official government portal. Here’s how it works:

French Filing Methods

Filing Method	Who Can Use It	Deadline (2025)	Key Features
Online (mandatory if you have internet access)	Most taxpayers with an internet connection	Depends on your département: (Ministère des Finances) • Départements 01–19: 22 May 2025 • Départements 20–54: 28 May 2025 • Départements 55 and above (incl. overseas): 5 June 2025	Fastest option, automatic calculation, instant confirmation via your online account on “impots.gouv.fr” Declaration is pre-filled; you just review and submit.
Paper (postal) Forms	Taxpayers without internet access or unable to file online	20 May 2025 (postmark date valid) (Ministère des Finances)	Traditional method using printed forms (e.g. Form 2042) — useful if you can’t access online services.
First-time or non-resident returns (paper required)	People submitting for first time or residents abroad with French-source income	Must use paper forms (e.g., 2042, 2042-NR) instead of online — even if you have internet access.	Traditional method using printed forms (e.g., Form 2042) — useful if you can’t access online services.

Online filing is mandatory if your residence has internet access. According to the French government tax portal, failure to file online when required results in a 0.2% penalty (minimum €60).

How to file online:

Access your account at impots.gouv.fr
Review pre-filled information (salary, pensions, investment income)
Add any missing information or corrections
Validate and submit electronically
Receive confirmation immediately

What French Taxes Will I Pay?

French residents are subject to several types of taxes. Here’s what to expect:

Income Tax (Progressive Rates)

French tax rates for 2025 (filed in 2026):

Income Range	Tax Rate
Up to €11,294	0%
€11,295 to €28,797	11%
€28,798 to €82,341	30%
€82,342 to €177,106	41%
Above €177,106	45%

Additional high-income surtaxes:

Income Level (Single)	Income Level (Married)	Surtax Rate
Above €250,000	Above €500,000	3%
Above €500,000	Above €1,000,000	4%

These combined rates can reach 55.4% for the highest earners, making France one of the countries with the highest tax rates globally.

Example: Marie’s Paris Tax Bill

Marie earns €90,000 working as a marketing manager in Paris:

French income tax: €17,642
CSG/CRDS (9.7% + 0.5%): €9,180
Total taxes: €26,822 (29.8% effective rate)

When Marie files her U.S. return, she’ll report $99,000 (converted at current exchange rates) and use the Foreign Tax Credit for the €26,822 she paid to France, eliminating her U.S. tax liability entirely.

France levies social charges on most types of income:

CSG (Contribution Sociale Généralisée): 9.2% to 9.7% depending on income type
CRDS (Contribution au Remboursement de la Dette Sociale): 0.5%
Combined rate: Typically 9.7% to 17.2% on various income sources

Important

Following the 2018 Eshel decision, CSG/CRDS on employment income is now creditable against U.S. taxes as “income tax” for Foreign Tax Credit purposes.

The U.S.-France Totalization Agreement prevents you from paying social security taxes to both countries. If you’re paying French social charges, you typically don’t pay U.S. Social Security tax on the same income.

How the Totalization Agreement works:

Employment Situation	Pay Social Security To:	Duration
U.S. company assignment for over 5 years	United States	Up to 5 years
Directly hired by a French company	France	After 5 years
Self-employed with a U.S. business temporarily in France	France	All years
Self-employed in France	France	Generally all years
Self-employed with U.S. business temporarily in France	United States	Up to 5 years

Example: David’s Self-Employment Savings

David, a freelance consultant in Lyon, earns €100,000 annually. He pays French social contributions of approximately €22,000. Without the Totalization Agreement, he’d also owe roughly $15,300 in U.S. self-employment tax. The agreement saves him thousands by eliminating the U.S. obligation.

Learn more about how totalization agreements work for expats.

Wealth Tax (Impôt sur la Fortune Immobilière – IFI)

France imposes a wealth tax on worldwide real estate assets exceeding €1.3 million for French tax residents.

IFI rates for 2025:

0% on net real estate up to €800,000
0.5% from €800,001 to €1,300,000
Progressive rates from 0.5% to 1.5% above €1,300,000

Example: The Williams Family’s IFI

The Williams family owns a primary residence in Nice, valued at €1.5 million, and a rental property in Paris, worth €800,000. Their total real estate holdings (€2.3 million) exceed the €1.3 million threshold. After the €800,000 allowance, they owe approximately €5,250 in annual IFI.

How Do I Avoid Double Taxation?

Three main protections work together to eliminate double taxation:

Foreign Earned Income Exclusion (FEIE)

The FEIE allows you to exclude up to $130,000 (2025 tax year, filed in 2026) of French employment income from U.S. taxation.

To qualify, you must meet either:

Physical Presence Test: Present in foreign countries for at least 330 full days during any 12-month period
Bona Fide Residence Test: Genuine resident of France for an entire tax year

Example: Julie’s FEIE Strategy

Julie earns €75,000 (US$82,000) working as a teacher in Bordeaux. She meets the Bona Fide Residence Test by establishing genuine French residency for the full 2025 calendar year. Using the FEIE on Form 2555, she excludes her entire salary from U.S. taxation, owing $0 to the IRS.

Foreign Tax Credit (FTC)

The Foreign Tax Credit provides a dollar-for-dollar credit for French taxes paid against your U.S. tax liability.

Why it’s powerful: French tax rates are generally higher than U.S. rates, so the FTC often eliminates your entire U.S. tax bill and may even create excess credits you can carry forward.

Example: Pierre’s Foreign Tax Credit

Pierre, a senior engineer in Paris, earns €180,000 (US$198,000):

French taxes paid (including CSG/CRDS): €73,800 (US$81,180)
U.S. tax before credits: $48,000
After Foreign Tax Credit: $0 (with $33,180 in excess credits carried forward)

Learn how to claim the FTC using Form 1116.

FEIE vs. Foreign Tax Credit: Which Should I Use?

Factor	Foreign Earned Income Exclusion (FEIE)	Foreign Tax Credit (FTC)	Winner for France
Maximum Benefit	$130,000 exclusion (2025)	Unlimited (dollar-for-dollar credit)	FTC for high earners
Best For	Earned income under $130,000	All income types, especially high earners	FTC in most cases
Eligible Income	Earned income only (wages, self-employment)	All income (earned + passive)	FTC for flexibility
Qualification	Physical Presence or Bona Fide Residence Test	No residency test required	FTC is easier to qualify for
French Tax Rates	Doesn’t matter	Higher French rates = more credits	FTC leverages high French rates
Carryforward	No carryforward available	10 years forward, 1 year back	FTC provides flexibility
Simplicity	Simpler for straightforward situations	More complex calculations	FEIE for simplicity
Self-Employment Tax	Still owe SE tax (15.3%)	Still owe SE tax (unless Totalization applies)	Tie
Family Credits	Can claim U.S. family credits	Can claim U.S. family credits	Tie
Best Strategy	Income under $130K, low French taxes	Income over $130K or high French taxes	FTC for most Americans in France

Recommendation for France: Given France’s high tax rates (up to 55.4%), most Americans benefit more from the Foreign Tax Credit. The FTC provides dollar-for-dollar reduction and often generates excess credits for future years.

Best combined strategy: Use FEIE for up to $130,000 of earned income, then use FTC for any remaining earned income and all passive income.

U.S.-France Tax Treaty

The tax treaty coordinates taxation between both countries and provides specific benefits:

Prevents double taxation on pension income
Coordinates social security taxation (Totalization Agreement)
Provides tie-breaker rules for dual residency situations
Offers reduced withholding rates on dividends, interest, and royalties

Best Strategy: Most Americans in France benefit most from the Foreign Tax Credit because French taxes are typically higher, often providing complete elimination plus carry-forward benefits.

Which Strategy Should I Use?

Your Situation	Best Strategy	Why
Earning under $130K in France	FEIE (Form 2555)	Excludes entire salary, simplest approach
France’s 45%+ rates provide a complete offset + excess credits	Combination: FEIE + FTC	Exclude first $130K, credit for French tax on remainder
Earning over $200K in France	FTC (Form 1116)	France’s 45%+ rates provide complete offset + excess credits
Investment income only	FTC	FEIE doesn’t apply to passive income
Self-employed in France	FTC typically better	Can credit French social charges + income tax
Corporate expat with housing	Combination: FEIE + Housing Exclusion	Maximize tax-free compensation

For more on avoiding double taxation as an expat, review our comprehensive guide.

Essential Tax Forms for Americans in France

Understanding which forms you need is crucial for proper compliance:

Form	Purpose	Who Needs It	Deadline
Form 1040	U.S. individual income tax return	All U.S. citizens/residents	June 15 (automatic for expats)
Form 2555	Foreign Earned Income Exclusion	Those claiming FEIE	With Form 1040
Form 1116	Foreign Tax Credit	Those claiming FTC for French taxes paid	With Form 1040
FinCEN Form 114 (FBAR)	Foreign bank account report	Foreign accounts > $10,000 total	April 15 (auto-extension to Oct 15)
Form 8938	FATCA reporting	Foreign assets > threshold ($200K/$400K)	With Form 1040
Form 8621	PFIC reporting for assurance vie	Owners of French life insurance policies	With Form 1040
Schedule B	Interest and dividend income	If over $1,500 or have foreign accounts	With Form 1040
Schedule C	Self-employment income	Freelancers/business owners in France	With Form 1040

French Tax Forms:

Online declaration via impots.gouv.fr
Forms 2042 (main), 2042-C (complementary), 2042-RICI (credits/deductions) if filing on paper
Form 2047 for foreign income (if applicable)

How Are French Retirement Accounts Treated for U.S. Taxes?

French retirement accounts are subject to complex treatment under U.S. tax law, and the rules vary significantly depending on the account type.

Account Type	French Treatment	U.S. Treatment	U.S. Reporting Required
Assurance Vie	Tax-advantaged growth, favorable withdrawals after 8 years	Taxable as PFIC; punitive unless special election made	Form 8621, FBAR, possibly Form 8938
PEA (Plan d’Épargne en Actions)	Tax-free after 5 years	Report on the appropriate country’s return	Complex trust/PFIC forms, FBAR, Form 8938
French Social Security	Standard retirement benefit	Treaty-protected; taxed only in country of residence	Treaty-protected; taxed only in the country of residence
Employer Pension Plans	Tax-deferred contributions and growth	Contributions taxable as compensation; distributions taxable	Include in income, claim FTC if applicable

For more details on planning your move, check out our comprehensive guide to retiring in France.

Assurance Vie (French Life Insurance)

Critical warning: Despite being “life insurance” in France, the IRS treats assurance vie policies as Passive Foreign Investment Companies (PFICs).

U.S. treatment:

All assurance vie income is taxable to the IRS
Must file Form 8621 for each policy
Subject to PFIC’s punitive tax treatment unless you make a special election
Must report on FBAR if balance exceeds $10,000
May require Form 8938 (FATCA) reporting depending on total foreign assets

Read our complete guide to Assurance Vie taxation for U.S. expats in France.

Plan d’Épargne en Actions (PEA)

U.S. treatment:

The IRS does not recognize the PEA’s tax-advantaged status
All PEA income is taxable annually, even if not distributed
Generally treated as a foreign trust or PFIC, requiring complex reporting
Dividends and capital gains are taxable in the year earned

Treatment under the U.S.-France tax treaty:

If you live in France:

French pensions (government or private) are generally taxable only in France
U.S. Social Security is taxable only in the U.S.
Report on the appropriate country’s return only

If you return to the U.S.:

French pensions become taxable in the U.S.
May qualify for treaty benefits, reducing U.S. taxation
Report on Form 1040 as pension income

Learn more about foreign pension and Social Security coordination.

Company Pension Plans and Retraite Complémentaire

U.S. treatment:

Employer contributions to French pension plans are typically taxable as compensation
Distributions are taxable as pension income
Treaty provisions may provide some relief

What About French Property and Capital Gains?

Selling property in France creates potential tax obligations in both countries, but the rules differ significantly.

Principal Residence

France: Your principal residence is completely exempt from capital gains tax if it’s your main home at the time of sale.

United States: You can exclude up to $250,000 of gain ($500,000 if married filing jointly) if you owned and lived in the home for 2 of the last 5 years.

The problem: If your gain exceeds the U.S. exclusion, you’ll owe U.S. capital gains tax even though France doesn’t tax it. You cannot claim a Foreign Tax Credit because no French tax was paid.

Example: The Johnsons’ Paris Apartment Sale

The Johnsons bought an apartment in Paris for €550,000 in 2019 and sold it for €950,000 in 2025:

French capital gain: €400,000 (US$440,000)
French tax: $0 (principal residence exemption)
U.S. capital gain after $500,000 exclusion: $0 (gain is below threshold)
Net result: Owes $0 to both countries

However, if the gain were €600,000 (US$660,000), they would owe U.S. tax on $160,000 with no offset.

Investment Property

If you own investment property (not your primary residence), both countries tax the gain, but calculations differ:

France:

19% capital gains tax plus 17.2% social charges (total 36.2%)
Exemptions available after 22 years of ownership (30 years for social charges)
30-year exemption timeline reduces tax annually

United States:

15% to 20% long-term capital gains tax (federal)
3.8% Net Investment Income Tax (if applicable)
Plus state taxes if you maintain state residency
Can claim Foreign Tax Credit for French taxes paid

Example: Anne’s Rental Property

Anne sells a rental property with a €120,000 gain (held for 10 years):

France taxes at an effective rate of 36.2% after allowances: €32,400
U.S. taxes 100% of gain (US$132,000) at 15%: US$19,800
Foreign Tax Credit for French tax paid: US$35,640
Net result: U.S. tax eliminated by FTC, with $15,840 in excess credits

What About the France Inbound Assignee Regime?

France offers an attractive tax regime for qualifying new residents that can significantly reduce your French tax burden while maintaining U.S. compliance.

Who Qualifies?

You must meet these requirements:

Haven’t been a French tax resident in the previous 5 years
Assigned to France by a foreign employer or directly recruited abroad
Become a French tax resident during your assignment

Benefits of the Regime

Two approaches available (choose annually):

Approach 1: 30% Flat Exemption

Exempt up to 30% of gross annual compensation from French income tax
Best for expats with straightforward salary packages

Approach 2: Actual Allowances and Foreign Workdays

Exempt specific expatriate allowances (housing, schooling, travel)
Exempt compensation for workdays performed outside France
Best for expats with substantial allowances or international travel

Read our complete guide to the France Inbound Assignee Regime.

What Are Common Mistakes U.S. Expats Make?

Avoid these pitfalls that catch many Americans in France by surprise:

Mistake	Consequence	Solution
Not filing U.S. returns (thinking $0 owed = no filing)	Failure-to-file penalties up to 25% of the tax due	File annually even if owing $0
Missing FBAR reporting	Penalties range from up to $10,000 per year for non-willful violations	File if accounts exceed $10,000 total
Treating assurance vie as non-taxable	Unreported PFIC income, potential penalties	Report on Form 8621 annually
Not understanding totalization	Paying social security to both countries	Verify which country’s system applies
FTC is usually better for France due to high rates	Paying more U.S. tax than necessary	FTC usually better for France due to high rates
Forgetting state taxes	Continued state tax liability	Properly terminate state residency before moving
Not reporting French property sales	Unreported capital gains	Apply within the deadline if qualifying
Missing IFI reporting	French wealth tax penalties	Report if real estate exceeds €1.3M
Missing Inbound Assignee Regime	Paying more French tax than necessary	Apply within the deadline if you qualify
Inadequate documentation	Cannot prove tax payments or residency	Keep 3 years of records minimum

Learn more about FBAR reporting for French financial assets.

How Can Greenback Help Americans Living in France with Taxes?

At Greenback, we specialize in U.S. expat taxes and work closely with French tax partners to provide comprehensive cross-border tax services.

How the process works:

Upload your documents once through our secure portal. Your Greenback accountant works with you to prepare your U.S. return, ensuring optimal coordination and maximum tax savings. We can also connect you with our trusted French tax partners for your French filing needs.

No matter how late, messy, or complex your return may be, we can help. You’ll have peace of mind, knowing that your taxes were done right.

If you’re ready to be matched with a Greenback accountant, click the Get Started button below. For general questions on US expat taxes or working with Greenback, contact our Customer Champions.

Want peace of mind with your France–US taxes?

Many Americans in France qualify for zero US tax when filings are aligned with French rates. Our team ensures your US return works with your French tax assessment, not against it.

This article provides general tax information for educational purposes. Tax laws are complex and subject to frequent changes. Always consult with a qualified tax professional for advice specific to your France-U.S. tax situation.

France-Specific Guides:

U.S. Tax Essentials:

Frequently Asked Questions

Question	Answer
Do I need to file French taxes if I’m only in France temporarily?	If you meet French tax residency requirements (primary home, 183+ days, or center of economic interests in France), you must file French taxes on worldwide income. The duration doesn’t matter—it’s about meeting residency criteria.
Can I use both the FEIE and Foreign Tax Credit?	Yes, but not on the same income. You can use FEIE for earned income and FTC for passive income (dividends, interest, rental income) or amounts above the FEIE limit. This combined strategy often works best.
What if my assurance vie policy was opened before I became a U.S. citizen?	Unfortunately, timing doesn’t matter. The IRS treats all assurance vie policies as PFICs regardless of when they were opened. You must file Form 8621 and report income annually.
Do French social charges (CSG/CRDS) count for the Foreign Tax Credit?	Yes, following the 2018 Eshel decision, CSG/CRDS on employment income is now creditable as “income tax” for FTC purposes. This significantly increases your available credits.
How does the Inbound Assignee Regime affect my U.S. taxes?	The regime reduces your French taxes but doesn’t directly affect U.S. filing requirements. However, the reduced French tax bill means you’ll have fewer foreign tax credits available, potentially increasing U.S. tax liability.
What if I own French property through an SCI?	An SCI (Société Civile Immobilière) may be treated as a partnership or corporation by the IRS, requiring Form 8865 or Form 5471. The reporting is complex—professional guidance is essential.
Can I deduct French property taxes on my U.S. return?	No. Since 2018, the TCJA eliminated the deduction for foreign property taxes. You also cannot claim them as a Foreign Tax Credit because they’re not income taxes.
What happens if I don’t report my French bank accounts on FBAR?	Non-willful FBAR violations carry penalties up to $16,536 per form for 2025. Willful violations can be $165,353 or 50% of account balance. Use the Delinquent FBAR Submission Procedures to catch up.
How do I prove Physical Presence Test for FEIE?	Keep passport stamps, credit card statements, rental agreements, utility bills, and travel booking confirmations. Create a day-by-day log showing where you were for the entire 12-month period.
What if my spouse is French and we file jointly in France?	For U.S. purposes, you can file Married Filing Jointly only if your spouse elects to be treated as a U.S. resident for tax purposes. Otherwise, file Married Filing Separately. Your spouse isn’t required to get an ITIN if filing separately.

Free Guide 15 Tax Tips Every American Expat Needs To Know in 2025

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