Written by Kirsten Simmons
Table of contents:
IRS treatment of contributions to Superannuation funds
IRS taxation of Superannuation fund withdrawals
Reporting Superannuation funds on U.S. tax and Treasury forms
Your Australian employer is required to put 9.5% of the Super guarantee of your salary into your Super. The IRS considers the SG portion to be Social Security. So, it is not included in your income on your U.S. return.
Any amount above the SG amount is included in your income on your U.S. return.
Voluntary contributions are not concessional for U.S. tax and are included in income as part of gross wages.
These benefits are partially taxable in the U.S. The taxable portion is determined by how much you and your employer have historically contributed to the plan.
Refer to the IRS publications for more information:
Your superannuation account must be reported on the FBAR (FinCEN Report 114) and Form 8938 in accordance with the Foreign Account Tax Compliance Act (FATCA).
In addition, if you have a Self Managed Super Fund (SMSF), it is considered a foreign grantor trust and requires filing Form 3520/3520-A. If the SMSF contains PFIC inside the SMSF, then Form(s) 8621 must also be filed.
Example:
Australian SMSF documents show 5 mutual funds, direct dividends, interest, trust expenses, and tax paid.
Proper filing of the SMSF account would require an additional Form 3520a, 3520, and Form 8621 under Sec.1296.
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