International Tax

Are U.S. citizens who work abroad for a foreign employer permitted to participate in a foreign company’s retirement plans?

The answer depends on the company’s retirement plan. If you are legally employed by a non-U.S. employer and that employer has a retirement plan, you may be allowed to participate in it. However, most foreign retirement plans are not considered to be a qualified retirement plan for U.S. tax purposes. This means that “pre-tax” contributions would not reduce your U.S. taxable wages. The employer contributions to a foreign retirement plan would generally be considered income for U.S. tax purposes.

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