China has a tax treaty but no totalization agreement — so self-employment tax stays.
There is a US–China income tax treaty, and Chinese individual income tax is progressive to 45%, so the foreign tax credit is usually available and often better than the exclusion. There is no totalization agreement, which means US self-employment tax at 15.3% applies with no relief.
Tax snapshot — China
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Sources: IRS Publication 54; IRS Publication 514; US–China income tax treaty; China's 2019 individual income tax reform and the six-year rule; the extension of preferential treatment for foreigners' fringe benefits to 31 December 2027; Rev. Proc. 2025-32; 31 CFR 1010.350. Checked 22 September 2026.
What that means on your return
The split matters: a treaty relieves double income tax, a totalization agreement relieves double social security. China has the first and not the second. An employed American is usually fine; a self-employed one pays SECA on top of whatever China takes.
Individual income tax is withheld monthly and reconciled annually, and the annual reconciliation can produce a refund that changes the foreign tax credit you already claimed. Amended positions are common here and worth expecting rather than fearing.
Mandatory social insurance contributions are not income taxes. They do not go on Form 1116, and with no totalization agreement they buy no relief from US self-employment tax either.
The six-year rule decides how far Chinese tax reaches: a foreign individual resident for 183 days or more in each of six consecutive years becomes taxable in China on worldwide income from the seventh. A single absence of more than thirty consecutive days in a year breaks the run and resets the count.
Foreign nationals who are Chinese tax residents can take eight categories of tax-exempt fringe benefits — housing, children's education, language training, meals, laundry, relocation, home leave and business travel — instead of the special additional deductions, and that preferential treatment has been extended to 31 December 2027. None of it carries across: those benefits are still compensation on the US return.
If you are in China as a…
Questions I get about China
China has a treaty. Why do I still pay self-employment tax?
Because a tax treaty and a totalization agreement are different instruments. The treaty addresses income tax; only a totalization agreement can relieve US self-employment tax, and China has none. Net self-employment income stays subject to 15.3% SECA.
Are my Chinese social insurance contributions creditable?
No. They are not income taxes, so they do not belong on Form 1116, and they do not relieve SECA.
What is the six-year rule?
A foreign individual resident in China for 183 days or more in each of six consecutive years becomes taxable in China on worldwide income from the seventh year. One absence of more than thirty consecutive days in a year breaks the run and resets it.
My housing and school fees are tax-exempt in China. Are they exempt to the IRS?
No. The Chinese exemption for foreigners' fringe benefits — extended to 31 December 2027 — is a Chinese rule. On the US return they are compensation for services performed abroad and belong in foreign earned income.
Should I claim the exclusion or the foreign tax credit in China?
It turns on your effective local rate. Where local tax is high the credit usually beats the exclusion and leaves your income counted for IRA purposes; where it is low the exclusion usually wins. Revoking the exclusion binds you for five years without IRS consent, so it is decided deliberately — that comparison is what the position review is for.
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 Chinese 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 China this year?
Fifteen 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 — 14 years in practice, 11 of them as an Enrolled Agent.