U.S. citizen in France: married to a non-u.s. spouse, filing separately, california, ties cut
Combined marginal rate across this income: 13.5%. Rates are 2026 marginal rates after treaty credits, as an upper bound.
- Residence
- France, 5 full year(s)
- U.S. filing status
- Married filing separately
- Income (all sources)
- 150,300 EUR ≈ $174,348
- U.S. ordinary marginal rate
- 24%
- U.S. qualified rate
- 15%
- NIIT exposed
- yes
- U.S. state
- California (ties cut)
- French tax shares
- 3
- French marginal rate (TMI)
- 30%
| Income | Amount | U.S. | State | France | Who taxes | Combined |
|---|---|---|---|---|---|---|
| Salary | €150,000 | 24% | — | 30% | Residence first, U.S. credits | 30% |
| Bank interest (local) | €300 | 24% | — | 31.4% | Residence first, U.S. credits | 35.2% incl. NIIT |
| Gain on selling your main home | €300,000 | 4.2% | — | — | U.S. only | 5.3% incl. NIIT |
Why each income is taxed this way
Salary · 30% · Taxed where you work; the U.S. credits that tax (FTC). The FEIE is the alternative.
- U.S.: Ordinary income, marginal 24%
- State: California: ties cut, not a resident
- France: Income scale, marginal 30% (3 shares) · social contributions: ≈22% employee social contributions
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · US.STACKING · STATE.TIESCUT · STATE.STICKY · FR.RESIDENT · FR.BAREME.2026 · FR.SOCIAL.WAGES · US-FR.SAVING · US-FR.ART24.RESOURCE · US.FTC · US.FEIE.2026
Bank interest (local) · 35.2% · France taxes first; the U.S. credits French tax, CSG/CRDS included.
- U.S.: Ordinary income, marginal 24%
- State: California: ties cut, not a resident
- France: Flat tax (PFU) 31.4% = 12.8% + 18.6% social charges
- 3.8% NIIT on top: no foreign credit allowed.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · STATE.TIESCUT · STATE.STICKY · FR.RESIDENT · FR.PFU.2026 · US-FR.SAVING · US-FR.ART24.RESOURCE · US.FTC
Gain on selling your main home · 5.3% · France exempts a main home; only the U.S. can tax the part above §121.
- U.S.: §121 excludes $250,000; the rest (28% of the gain) at 15%
- State: California: ties cut, not a resident
- France: Main home: gain exempt
- 3.8% NIIT on top: no foreign credit allowed.
- Check the currency gain if a local-currency mortgage is repaid (§988).
US.WORLDWIDE · US.121 · US.QUALIFIED.2026 · US.988.MORTGAGE · STATE.TIESCUT · STATE.STICKY · FR.RESIDENT · FR.RP.EXEMPT
Forms to file
| IRS | Form 1040 | Every year, wherever you live (June 15 for filers abroad). |
| IRS | Form 1116 | Credit for French/UK tax, by category (general, passive). |
| IRS | Form 8960 | Net Investment Income Tax. |
| IRS | Schedule 8812 | Child Tax Credit; refundable part only without the FEIE. |
| IRS | FinCEN 114 (FBAR) | Foreign accounts ≈ $23,200, above $10,000. |
| French tax office | 2042 | Annual French return for worldwide income. |
| French tax office | 3916-bis × 1 | Accounts outside France: U.S. bank account. |
Watch out for
Use the FTC, not the FEIE: up to $3,400 refundable
With 2 children, the Child Tax Credit ($2,200 each, $1,700 refundable) can produce a U.S. refund. Filing Form 2555 (FEIE) blocks the refundable part.
3.8% NIIT on investment income
Your income is above the threshold. Foreign tax cannot offset it (Federal Circuit, August 2026).
California is a sticky state
California presumes you remain domiciled unless you clearly cut ties, and gives no credit for foreign tax. Keep evidence that you left (closed licence, voter registration, no home).
Non-U.S. spouse
Filing separately keeps your spouse's income and accounts out of the U.S. system; joint filing needs an election and brings in their worldwide income.
Home sale: currency trap
The U.S. measures your gain in dollars, and repaying a euro or pound mortgage can create a taxable currency gain even when you made no profit.
One social security system
Totalization agreements mean you pay social contributions where you work, not U.S. FICA or self-employment tax (keep a certificate of coverage if self-employed).
Rule trace (25 rules)
- US.WORLDWIDE — Citizenship-based taxation. U.S. citizens and green-card holders report worldwide income every year, wherever they live. (high, checked 2026-11-15 · IRS — U.S. citizens and resident aliens abroad (official))
- US.ORDINARY.2026 — 2026 ordinary income brackets. 10% to 37%. Single: 22% from $50,401, 24% from $105,701, 32% from $201,776. Joint: 22% from $100,801. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · Tax Foundation — 2026 brackets (Rev. Proc. 2025-32))
- US.STACKING — FEIE stacking rule. Income excluded with the FEIE still sets the rate on the rest of your income. (medium, checked 2026-11-15 · 26 U.S.C. §911 — foreign earned income exclusion, stacking in (f) (official))
- STATE.TIESCUT — No state tax after cutting ties. Once domicile is clearly moved abroad, most states stop taxing you. Xpat's reading Xpat's reading: Xpat assumes no state tax once you say ties are cut; a state may still disagree. (medium, checked 2026-11-15 · Tax Foundation — state income tax rates 2026)
- STATE.STICKY — Sticky states. California, Virginia, New Mexico and South Carolina are known for treating former residents as still domiciled. Xpat's reading Xpat's reading: A practitioner's shortlist, not a legal category: these states audit departures more often. (medium, checked 2026-11-15)
- FR.RESIDENT — French tax residence. French residents are taxed on worldwide income and must declare it each spring (2042). (high, checked 2026-11-15 · impots.gouv.fr — Imposition des revenus de source étrangère (2047, 2074) (official))
- FR.BAREME.2026 — Income tax scale 2026. Per tax share: 0% to €11,600, 11% to €29,579, 30% to €84,577, 41% to €181,917, then 45%. Couples get 2 shares; +0.5 per child for the first two, +1 from the third. Set by the finance law for 2026 (loi n° 2026-103 of 19 February 2026, CGI art. 197) for income earned in 2025. Xpat's reading Xpat's reading: The scale for income earned in 2026 will be set by the finance law for 2027, expected around December 2026. Until then Xpat applies the scale voted for 2025 income; thresholds usually rise by about 1% a year. (high, checked 2026-11-15 · BOFiP — Indexation du barème de l'impôt sur le revenu, revenus 2025 (loi n° 2026-103, art. 4) (official) · Service-Public.fr — Impôt sur le revenu : tranches et taux d'imposition 2026 (official) · Barème IR 2026 (revenus 2025))
- FR.SOCIAL.WAGES — Social contributions on wages. About 22% employee contributions, including 9.7% CSG/CRDS, which the IRS accepts as creditable since 2019. Xpat's reading Xpat's reading: 22% is an average for employees; the real rate depends on salary level and status. (medium, checked 2026-11-15 · CSG/CRDS creditable since 2019)
- US-FR.SAVING — Saving clause. The U.S. keeps taxing its citizens as if the treaty did not exist, except where the treaty says otherwise. (high, checked 2026-11-15 · IRS — U.S.–France income tax convention (1994), text (official) · IRS — US–France treaty technical explanation (official))
- US-FR.ART24.RESOURCE — Article 24(2): re-sourcing. French-source income taxed by France: the U.S. credits the French tax (Form 1116). (high, checked 2026-11-15 · IRS — U.S.–France income tax convention (1994), text (official) · Hayot — France–US treaty Article 24)
- US.FTC — Foreign Tax Credit. Foreign income tax on foreign-source income is credited against U.S. tax (Form 1116), by category (general, passive). Excess credits carry forward 10 years. (high, checked 2026-11-15 · 26 U.S.C. §901 — foreign tax credit (official) · IRS — Instructions for Form 1116 (Foreign Tax Credit) (official))
- US.FEIE.2026 — Foreign Earned Income Exclusion. Up to $132,900 of foreign wages or self-employment income excluded in 2026 (Form 2555). Not available for pensions or investment income. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · IRS — Instructions for Form 2555 (Foreign Earned Income) (official))
- FR.PFU.2026 — Flat tax (PFU) 31.4%. Interest, dividends and share gains: 12.8% income tax + 18.6% social charges from 1 January 2026. (high, checked 2026-11-15 · economie.gouv.fr — PFU 31.4% from 2026 (official) · BOFiP — Prélèvement forfaitaire unique (CGI art. 200 A) (official))
- US.NIIT — Net Investment Income Tax. 3.8% on interest, dividends, gains and rent when MAGI exceeds $200,000 single / $250,000 joint / $125,000 separate. Wages, pensions and Social Security are not investment income. (high, checked 2026-11-15 · 26 U.S.C. §1411 — net investment income tax (official))
- US.NIIT.NOCREDIT — No foreign tax credit against NIIT. Federal Circuit, Aug 31 2026 (Bruyea, Christensen): treaty credits cannot reduce the NIIT, including under the French treaty. Further review may still be possible, so review any treaty-based position with an adviser. Contested Xpat's reading: Xpat applies the Federal Circuit decisions: the 3.8% is added on top and never credited. The Court of Federal Claims had ruled the other way, and further review may still be sought. (high, checked 2026-11-15 · Fed. Cir. — Estate of Bruyea v. United States, No. 2025-1563 (Aug. 31, 2026) (official) · EY — Federal Circuit: no FTC against NIIT (Aug 2026) · RSM — Christensen and Bruyea reversed: what taxpayers abroad should do (Nov 2026))
- US.121 — Home sale exclusion (§121). Up to $250,000 ($500,000 joint) of gain on a main home is excluded if owned and lived in for 2 of the last 5 years, including a home abroad. (high, checked 2026-11-15 · 26 U.S.C. §121 — exclusion of gain on a principal residence (official))
- US.QUALIFIED.2026 — Qualified dividends and long-term gains. 0% / 15% / 20%. Single: 15% from $49,451, 20% from $545,501. Joint: 15% from $98,901, 20% from $613,701. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · 26 U.S.C. §1 — tax rates, including capital gains rates in (h) (official))
- US.988.MORTGAGE — Currency gain on a foreign mortgage. Repaying a euro or pound mortgage after the dollar strengthens creates a taxable U.S. currency gain, even with no cash profit. (medium, checked 2026-11-15 · 26 U.S.C. §988 — foreign currency transactions (official))
- FR.RP.EXEMPT — Main home exempt. The gain on selling your main residence is exempt from French tax. (high, checked 2026-11-15 · Service-Public.fr — Plus-value immobilière (résidence principale exonérée) (official))
- US.CTC.2026 — Child Tax Credit 2026. $2,200 per child under 17, of which up to $1,700 is refundable (Schedule 8812). (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · 26 U.S.C. §24 — child tax credit (official))
- US.FTC.ACTC — FEIE blocks the refundable child credit. Anyone who files Form 2555 cannot claim the refundable Additional Child Tax Credit. Using the FTC instead keeps up to $1,700 per child refundable. (medium, checked 2026-11-15 · 26 U.S.C. §24 — child tax credit (official))
- US.FBAR — FBAR (FinCEN 114). Foreign financial accounts above $10,000 in total at any time. (high, checked 2026-11-15 · FinCEN — Report of Foreign Bank and Financial Accounts (FBAR) (official))
- FR.3916 — Foreign accounts (3916-bis). Every account outside France (U.S. bank, brokerage, IRA custodian) is declared each year. €1,500 fine per account. (high, checked 2026-11-15 · impots.gouv.fr — declaring foreign accounts (3916) (official) · Service-Public.fr — Déclarer ses comptes à l'étranger (3916 / 3916 bis) (official))
- US.NRA.SPOUSE — Non-U.S. spouse. Married to a non-U.S. person: file separately, or elect to treat the spouse as resident and bring their worldwide income in. (high, checked 2026-11-15 · 26 U.S.C. §6013 — joint returns, election for a nonresident spouse in (g) (official))
- US.TOTALIZATION — Social security totalization. The U.S. has agreements with France and the UK: you pay into one system only (usually where you work). (high, checked 2026-11-15 · SSA — International social security agreements (official))