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Foreign pension: what do I report to the IRS?
A band only. Nothing you enter here leaves your browser unless you ask for the result by email.
How this screen works
This tool deliberately produces a scope rather than a verdict. That is not caution for its own sake — it is the honest shape of the answer. Foreign pensions have no general US rule. The treatment turns on four things at once:
- The plan's legal form under local law — the fact everything else hangs on.
- What it holds. Pooled non-US funds inside the plan raise the PFIC question.
- Whether a treaty article covers it, and whether claiming it needs Form 8833.
- Value, which decides the Form 8938 thresholds — aggregated with your other foreign assets.
Each answer below is labelled likely, possible or unlikely because that is the resolution the inputs support. A confident yes or no needs the plan's own documents, and a foreign pension is exactly the area where a confident wrong answer is expensive.
Limitations
- No treaty text is applied. Country selection provides context, not a treaty analysis.
- Form 8938 is screened from a value band, not from your actual aggregate of specified foreign financial assets.
- Nothing here addresses the local-country tax treatment of the plan.
- Prior-year positions and any existing basis in the plan are outside this screen.
Sources
- 31 CFR §1010.350 and the FinCEN 114 instructions — foreign financial accounts.
- IRC §6038D and the Form 8938 instructions — specified foreign financial assets.
- IRC §1297 and the Form 8621 instructions — passive foreign investment companies.
- IRC §6048 and Rev. Proc. 2020-17 — foreign trust reporting and the tax-favoured plan exemption.
Common questions
Is my foreign pension taxable in the US?
There is no single answer, and anyone who gives you one without seeing the plan documents is guessing. US treatment depends on the plan's legal form under local law, whether an income tax treaty defers taxation of contributions and growth, and what the plan holds. Some plans are effectively deferred like a US retirement account; others produce US tax on growth you cannot access.
Do I report a foreign pension on the FBAR?
Generally yes if the plan holds an individual account balance at a foreign financial institution and your foreign accounts combined exceeded $10,000 at any point in the year. A pure defined-benefit promise with no account in your name is more likely to fall outside FBAR — but many plans described as defined benefit do carry a member account, so check rather than assume.
Can a foreign pension contain PFICs?
Yes, and it is the most expensive thing on the list. Non-US funds are generally PFICs for a US person, and holding them inside a foreign retirement plan does not by itself take them out of scope. Whether a treaty article or the plan's status as a qualifying scheme protects them is a specific question about your specific plan, not a general rule.
Does Form 3520 apply to my foreign retirement account?
It can. Some personal, non-employer retirement arrangements are treated as foreign trusts, which brings Forms 3520 and 3520-A and substantial penalties for missing them. Relief is available for certain tax-favoured retirement plans, but it has conditions that have to be met rather than assumed.
What about Form 8938?
An interest in a foreign pension plan is a specified foreign financial asset and counts toward the Form 8938 thresholds. Those thresholds are considerably higher for taxpayers living abroad than for US residents, and they aggregate with all your other specified foreign financial assets — so a pension below the threshold on its own can still put you over it. A state social-security pension paid by a foreign government is the exception: the Form 8938 instructions exclude it.
Country-specific guides
UK SIPP
Self-invested personal pensions and the US treaty.
Swiss pillar 2
Vested benefits, FBAR and Form 8938.
German pension
Statutory and occupational schemes.
Canadian RRSP
Treaty deferral and the reporting that remains.
Australian super
The plan type US rules handle worst.
Danish pension
Ratepension, kapitalpension and US filings.
Before you rely on this result
What would settle it, and what covers it
Documents or facts needed
- • The pension type and country
- • Employee and employer contributions for the year
- • The annual statement
- • The treaty article, if one applies
Where this leads
Complex · $799 — foreign pensions usually need a treaty position on the return.
Also possible: Simple ($299) · Annual Concierge (From $999). The cheapest route that covers your facts is the right one; a package never covers more than one tax year.
Complex facts are scoped on a free call before any price is quoted; booking does not create an engagement.
How to read a status
- Likely:
- The facts entered meet the published test; confirm the inputs before acting.
- Possible:
- Some facts point this way and others are missing; more information decides it.
- Needs review:
- These inputs leave it open; a person should look before filing.
- Not currently indicated:
- Nothing entered triggers it this year; a changed fact can change the answer.
- Outside supported scope:
- This item is routed to a professional for preparation.
Scope. A first screen; pension treatment turns on the plan's legal form and the treaty. This is a computation on the answers you gave, not individualized tax advice.
Tool: /tools/foreign-pension-tax-checker
What changes the result
This answer changes if…
Whether the exclusion or the credit is the better route
- …your foreign income tax rate is above the U.S. rate on the same income — the foreign tax credit tends to leave no U.S. tax and carries excess credit forward; the exclusion cannot.
- …you were in the United States for more than 35 days in the twelve-month period — the physical-presence test for the exclusion is lost for that period.
- …the income is a pension, a distribution or investment income rather than earned income — the exclusion covers earned income only; the credit covers foreign tax on any category.
- …you claimed the exclusion in a prior year and now revoke it — a revocation locks the exclusion out for five years without IRS consent.
- …you have self-employment income — the exclusion does not reduce U.S. self-employment tax; a totalization certificate does.
Whether the 3.8% net investment income tax applies
- …your modified adjusted gross income is below the threshold for your filing status — the tax applies only to the lesser of net investment income and the excess over the threshold. Check it
- …you claim the foreign earned income exclusion — excluded wages are added back for the threshold test.
- …you rely on a treaty to credit foreign tax against this tax — the credit against the net investment income tax rests on a treaty article and on litigated positions, not on Form 1116.
- …a PFIC is under a QEF election — QEF inclusions enter net investment income only under a separate election (the 'section 1.1411-10(g)' election).
Each line names a fact that moves the result; what it moves to depends on the rest of your facts. Nothing here is a determination.
How Atamatax calculations are produced — the tests applied, statutory sources and review cadence — is documented in the methodology, and how the engine is validated in accuracy & review. Calculation fixes are recorded in the changelog.
Authorities cited
- Rev. Proc. 2014-55 — Rev. Proc. 2014-55 — automatic tax deferral for Canadian RRSPs and RRIFs; eliminates the Form 8891 election
- Rev. Proc. 2020-17 — Rev. Proc. 2020-17 — exemption from Forms 3520 and 3520-A for certain tax-favored foreign retirement and non-retirement savings trusts
- IRS Form 3520 — About Form 3520 — Annual Return To Report Transactions With Foreign Trusts
- IRC §6048 — IRC §6048 — Information reporting for foreign trusts (Forms 3520 / 3520-A)
Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.
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