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Can a tax treaty let me exclude my foreign pension from U.S. tax?

Sometimes, but it is not automatic. A number of U.S. tax treaties contain a pensions article that assigns taxing rights on private or government pensions to one country, and some carve pensions out of the saving clause so U.S. residents can still benefit. Whether your specific foreign pension is exempt depends on the exact treaty, the type of pension, and whether it is government or private. Absent a favorable treaty provision, a foreign pension is generally U.S.-taxable when distributed, and the underlying account may also need FBAR and Form 8938 reporting during the accumulation years. Because treaty pension articles vary widely and interact with the saving clause, this is a spot where reading the treaty text and getting cross-border tax advice pays off. Do not assume your home-country pension is tax-free in the U.S.

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