Australia: superannuation is the question the treaty does not clearly answer.
There is a US–Australia income tax treaty and a totalization agreement, and Australian rates are high enough that the foreign tax credit usually beats the exclusion. The unresolved item is superannuation: its US treatment is genuinely unsettled, and it is the largest open question on most Australian returns.
Tax snapshot — Australia
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Sources: IRS Publication 54; IRS Publication 901; US–Australia income tax treaty (1982, protocol 2001); US–Australia totalization agreement (2002); IRC §1291–1298; Rev. Proc. 2025-32. Checked 28 August 2026.
What that means on your return
Super is tax-favoured in Australia and not clearly a pension for US treaty purposes. Depending on how a fund is characterised, contributions and internal earnings may be currently taxable to you in the US, with reporting obligations attached. This is a position to take deliberately, document, and hold consistently year to year.
Franking credits reduce Australian tax on dividends. They are not creditable against US tax, and the grossed-up dividend they come with can increase your US taxable income — the opposite of the effect people expect.
Australian managed funds and listed investment companies are commonly PFICs, so an ordinary local investment account can carry Form 8621 and its default calculation.
If you are in Australia as a…
Questions I get about Australia
Is my superannuation tax-deferred for US purposes?
Not clearly. Australia defers tax on it; the US treatment depends on how the fund is characterised, and on one view contributions and earnings are currently taxable. It is an area where a documented, consistent position matters more than a confident answer.
Can I use franking credits on my US return?
No. They reduce Australian tax on the dividend but are not creditable against US tax, and the gross-up can raise your US taxable income.
I already pay high tax in Australia. Do I still file a US return?
Yes, every year. Citizenship-based taxation does not care what you pay locally. The foreign tax credit usually removes the US liability, but the filing obligation stands, and FBAR and FATCA reporting stand with it.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Australian bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Australia this year?
Twenty minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 17 years in practice, 12 of them as an Enrolled Agent.