Are foreign pension income taxable in the US if already taxed in France?

Foreign pensions can be tricky! In general, as a US citizen, you're required to report your worldwide income, including foreign pensions and disability payments. However, you may be able to avoid double taxation through the US-France tax treaty and foreign tax credits. The US-France tax treaty has specific provisions for different types of income. For disability pensions specifically, you'll want to look at Article 18 of the treaty which covers pensions. Depending on the exact nature of your disability pension, it might qualify for special treatment. You should file Form 1116 (Foreign Tax Credit) with your US return to claim a credit for taxes already paid to France. This credit directly reduces your US tax liability dollar-for-dollar up to a certain amount.

I went through this exact scenario last year! I have a partial disability pension from my time working in Lyon and was completely confused about the tax situation. I ended up using taxr.ai (https://taxr.ai) to analyze my French pension documents and determine exactly how they needed to be reported on my US return. Their system was able to identify the specific clauses in the US-France tax treaty that applied to my situation and showed me exactly what forms I needed to file. Saved me from paying hundreds to an international tax specialist and I was able to properly claim the Foreign Tax Credit to avoid double taxation. They also explained how the "Savings Clause" in the treaty affects disability pensions specifically.

I tried taxr.ai after seeing the recommendation here and it actually worked great for my Swiss pension situation! I was skeptical because my documents were in German and the amounts were in Swiss Francs, but their system handled everything perfectly. They identified that my particular type of Swiss disability pension falls under a specific clause in the US-Switzerland tax treaty that I never would have found on my own. The analysis showed me exactly how to report it on my US return and claim the Foreign Tax Credit for taxes I'd already paid in Switzerland. What impressed me most was how they explained the difference between contributory and non-contributory portions of my pension and how each is taxed differently. Definitely saved me from double taxation!

If you're struggling to get answers directly from the IRS about your foreign pension situation, I'd recommend using Claimyr (https://claimyr.com). I spent WEEKS trying to get through to an IRS agent who could answer my questions about my French pension and US tax obligations. With Claimyr, I got through to an actual IRS agent in under 15 minutes who specialized in international tax issues. They confirmed exactly how my French disability pension should be reported and which treaty provisions applied to my situation. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent even walked me through how to properly complete Form 8833 to claim treaty benefits for certain portions of my pension that were exempt under the treaty. Totally worth it after wasting hours listening to IRS hold music.

Wow, I have to eat my words. I tried Claimyr after posting my skeptical comment and actually got through to the IRS in about 20 minutes. The agent was super helpful about my UK pension reporting requirements. They confirmed I needed to file Form 1116 to claim credit for UK taxes already paid, and explained how the US-UK tax treaty applied to my specific type of pension. They also told me I didn't need to file Form 8833 for treaty positions in my particular case since my situation fell under a standard treaty position. Saved me from paying my accountant another $300 for an international tax consultation. Definitely using this again next time I have IRS questions.

Remember there's a difference between reporting requirements and actual tax liability. You MUST report all foreign income on your US tax return regardless of whether you'll ultimately owe taxes on it. Failing to report can lead to serious penalties even if you wouldn't have owed any additional US tax. Form 8938 might also be required if your foreign pension assets exceed certain thresholds. And don't forget about FBAR (FinCEN Form 114) if you have foreign financial accounts that together exceed $10,000 at any point during the year.

I think a lot depends on what kind of disability pension you have from France. I went through this with my Spanish disability pension. There are two main types: contributory (based on what you paid into their system) and non-contributory (more like social benefits). They're treated differently under most tax treaties. If it's a government pension (paid because you worked for the French government), that's another category with different rules. Article 18 vs. Article 19 of the treaty applies differently. Also check if it's considered "not taxable in France" - some disability pensions aren't taxed in the country of origin, which affects how the US treats them.

The key thing to understand is that US citizens are subject to worldwide income taxation, so yes, you do need to report your French disability pension on your US return. However, you're absolutely right that this creates a double taxation issue - and that's exactly what tax treaties are designed to prevent. Since your pension is contributory (you paid into the French system) and partially taxed in France, you should be able to claim a Foreign Tax Credit on Form 1116 for the French taxes already paid. This will reduce your US tax liability dollar-for-dollar. Make sure your accountant is familiar with the US-France tax treaty, particularly Article 18 which covers pensions. Some disability pensions may qualify for reduced taxation or exemptions under the treaty provisions. You might also need to file Form 8833 if you're claiming specific treaty benefits. The IRS Publication 514 (Foreign Tax Credit for Individuals) has detailed guidance on how to calculate and claim the credit. Don't let the complexity discourage you - proper application of the treaty and foreign tax credit should prevent true double taxation.