The french taxation of american pensions

It’s no secret: Americans love France! Many of them dream of settling in our beautiful country at the end of their professional lives. If you are planning to retire in France, it’s essential to understand how French taxation applies to U.S. retirement pensions.
Likewise, many French citizens who spent part or all of their careers in the United States often wonder how their American pension income will be taxed upon returning to France.

The different types of American retirement plans

The U.S. retirement system differs significantly from the French model. Like in France, there is a public pension paid by the U.S. Social Security, but the benefit is usually modest. As a result, most individuals rely on private retirement savings or employer-sponsored plans to build a more substantial income for retirement.

Here’s a brief overview of the most common plans:

401K plans

This is one of the most common employer-sponsored retirement savings plans in the U.S. It’s a defined contribution plan: retirement benefits are not predetermined and will depend on investment returns. Contributions are made on a pre-tax basis (deducted from gross salary), and distributions are taxable at retirement.
In 2025, the annual employee contribution limit is $23,500, with an additional $7,500 allowed for individuals aged 50 and over.

Individual Retirement Arrangements (IRA)

These individual savings plans are available to anyone with earned income. Like the 401(k), contributions are tax-deductible and distributions are taxed upon withdrawal.
The contribution limit for 2025 is $7,000, or $8,000 for individuals aged 50 and older.

Roth IRAs

Unlike traditional IRAs, Roth contributions are made with after-tax income, but withdrawals (under qualifying conditions) are entirely tax-free.
In 2025, the same contribution limits apply: $7,000 or $8,000 if you’re 50 or older.
However, income limits apply:
• For single filers, full contributions are allowed if your modified adjusted gross income (MAGI) is below $150,000, and phased out up to $165,000.
• For married couples filing jointly, full contributions are allowed up to $236,000, and phased out up to $246,000.
Those earning above the phase-out limits are not eligible to contribute directly to a Roth IRA.

How the french taxation on American pensions works ?

Individuals who are tax residents in France must declare their worldwide income annually, subject to the provisions of international tax treaties.
Regarding retirement income, Article 18 of the tax treaty between France and the United States states:

” 1. Amounts paid under the social security or similar laws of a Contracting State to a resident of the other Contracting State or to a citizen of the United States, and amounts paid under a pension plan and other similar remuneration arising in one of the Contracting States in respect of prior employment to a resident of the other Contracting State, whether in the form of periodic payments or in a lump sum, shall be taxable only in the first-mentioned State. For the purposes of applying the provisions of this paragraph, pension and other similar remuneration shall be deemed to arise in a Contracting State only when paid out of a pension or other retirement plan established in that State.”

In other words, U.S. retirement pensions received by French tax residents remain taxable in the U.S. only.

However, the French tax authorities remind taxpayers that even though these pensions are not taxable in France, they must still be reported on the French income tax return. Why? Because they are used to calculate the effective tax rate applicable to your other French-taxable income. This avoids double taxation, since France grants a tax credit equal to the theoretical French tax on this foreign-source income.

* Franco-American Convention of August 31, 1994 amended by the amendments of December 8, 2004 and January 13, 2009