Retirement income and US taxes

[bibera]

Hello. I'm new on this forum. I'm a US citizen living in France, 61 (and a half) and I'll soon be retiring with a measly French retirement pension (I've worked in France for the totality of my worklife).
Someone told me that my retirement pension will not qualify for exempt "foreign earned income" and will have to be declared elsewhere and just qualifies for the "foreign tax credit". This is apparently also true for French unemployement compensation (ASSEDIC) which I am currently receivng but will be transfromed into retirement soon when I'm 62. This means I could pay US taxes on sums already taxed in France and pay more taxes than a US exec who earned $80 000!
This seems quite wierd and unfair to me. Is this true? You seem to be an expert on these matters.

Regards

[Bevdeforges]

I've moved your post into a thread of its own - again, to try and attract a few more responses.

Technically, neither unemployment nor retirement pension counts as "earned income" and so neither is subject to the US overseas earned income exclusion.

However, there is still both a tax treaty and a social security treaty between the US and France that should keep you from paying double taxes on any income. Both France and the US require you to declare your "worldwide income" on their respective tax forms.

On the US forms, you then take a tax credit for the taxes paid to the French government. This is a tax credit - dollar for dollar against whatever US liability you run up. If you pay $100 (or the euro equivalent) to the French, then you take that same $100 as a tax credit against whatever your US tax bill works out to be.

It seems weird and unfair to lots of us, but as long as you have your US citizenship, you have to file returns to the US, no matter where you live. For details, consult either publication 54 from the IRS (available on the IRS website) or contact AARO AARO - Association of Americans Resident Overseas, a US expat organization based in Paris that deals with taxes and other "legislative" kind of issues.
Cheers,
Bev