Ireland

Tax-deferred employer plans

Irish employer-sponsored pension schemes, both defined benefit and defined contribution, are structured as trusts with independent trustees. They are foreign trusts for U.S. purposes. The exemption is available only to an ‘eligible individual’ under §5.02: someone who is compliant (or comes into compliance) with U.S. income-tax filing and has reported the plan’s contributions, earnings, and distributions as income to the extent U.S. law requires; a participant who never reported plan earnings cannot rely on it until they do.

A U.S. person who is a member of an Irish occupational pension scheme must file Form 3520-A and Form 3520 annually for the part the member’s own contributions fund, once the member’s own contributions exceed the employer’s, counted as the note at the end of this section explains (Treas. Reg. §1.402(b)-1(b)(6)), or for any part the member otherwise owns, unless Rev. Proc. 2020-17 applies (the scheme must meet all §5.03 conditions, and you must be an eligible individual). This includes active members, deferred members (who have left the employer but retain vested benefits), and members receiving pension payments.

The U.S.–Ireland treaty (Article 18(1)(a)) makes pension payments taxable only in the recipient's State of residence, but the saving clause (Article 1(4)–(5)) leaves a U.S. citizen taxable as if there were no treaty, preserving only Article 18(1)(b) (social security) and 18(4) (child support). The treaty has no provision deferring tax on scheme earnings and does not affect Form 3520/3520-A reporting.

For a plan an employer contributes to, a trust holding it is generally a nonexempt employees’ trust described in §402(b). §6048(a)(3)(B)(ii) excepts transfers to §402(b), §404(a)(4), and §404A trusts from Part I, the participant’s own contributions included, and §679 does not make the participant the owner (see the Reporting Guide’s employer-plan section). Payouts the participant reports as compensation income are excepted from Part III. If the participant’s own contributions ever exceed the employer’s, the participant is treated as the owner of the part those contributions fund (Treas. Reg. §1.402(b)-1(b)(6)), reports it on Part II and Form 3520-A each year it is owned, and is taxed on its income each year. In that count, what the participant chose to put in, salary sacrifice included, is the participant’s, and anything the plan’s rules required taken from pay is the employer’s, as the IRS chief counsel read a national retirement fund in 1997. The rest is taxed when it vests and, after that, when paid out (§402(b)(1), (2)).

Tax-deferred individual plans

PRSAs are individual, portable retirement savings accounts introduced under the Pensions (Amendment) Act 2002. They are managed by authorized PRSA providers (insurance companies, banks, investment firms) and hold segregated assets for the individual.

PRSAs are foreign trusts for U.S. purposes. There are two types: Standard PRSAs (limited investment options, capped charges) and Non-Standard PRSAs (wider investment choices). The 3520-A reporting is the same for both: contributions, investment returns, fees, and opening/closing balances.

Employers who do not offer an occupational pension scheme must provide access to a Standard PRSA. Many U.S. persons working in Ireland are enrolled in a PRSA without realizing the U.S. reporting implications.

Other plans

Personal Retirement Bonds (PRBs, also called buy-out bonds) hold transferred benefits from a former employer's pension scheme. They are trust arrangements and are foreign trusts for U.S. purposes.

Approved Retirement Funds (ARFs) are post-retirement investment accounts where retirees can invest their pension lump sum rather than purchasing an annuity. ARFs hold segregated assets and are foreign trusts. Approved Minimum Retirement Funds (AMRFs) were abolished by Finance Act 2021; any existing AMRF became an ARF on 1 January 2022.

Each PRB or ARF requires its own Form 3520-A and Form 3520.

State Pension (Contributory / Non-Contributory)

The Irish State Pension is a social insurance program funded by PRSI (Pay Related Social Insurance) contributions. It is a pay-as-you-go system without segregated individual trust accounts.

The prevailing view is that the State Pension is not a foreign trust for Form 3520 purposes, following the same analysis as other social insurance systems. State Pension payments received by a U.S. person are taxable income but do not trigger 3520/3520-A reporting.

Gifts and inheritances

Ireland is a common source of inheritances for U.S. persons, particularly among the large Irish-American community. If a U.S. person receives more than $100,000 in gifts or bequests in a year from one nonresident alien individual or foreign estate (adding together gifts from donors related to each other), Form 3520 Part IV reporting is required. Gifts from foreign corporations or foreign partnerships exceeding $20,573 (for 2026, indexed for inflation) are also reportable.

Ireland imposes Capital Acquisitions Tax (CAT) at 33% on gifts and inheritances above certain thresholds (which vary by the relationship between donor and recipient). This is an Irish obligation and does not affect the U.S. reporting requirement.

Common scenarios include inheritance of Irish property (farmland, family homes), cash gifts from parents or relatives in Ireland, and bequests from Irish estates.

Penalties and practical notes

Failure to file Forms 3520/3520-A carries penalties under §6677: the greater of $10,000 or 35% of the gross reportable amount for certain Form 3520 failures (§6677(a)); 5% or $10,000 for Part II and 3520-A (§6677(b)).

The Irish tax year is the calendar year, aligning with the U.S. No fiscal year conversion is needed.

Irish pension administrators issue annual benefit statements showing contributions, investment returns, and fund values. Revenue Commissioners require annual reporting from pension schemes, so the data quality is generally good.

Ireland is a major hub for U.S. technology companies, and many U.S. citizens and green card holders work in Dublin. Ireland launched MyFutureFund (auto-enrolment) on 1 January 2026, administered by NAERSA, automatically enrolling employees aged 23–60 earning over EUR 20,000 who are not already in a pension scheme. Its U.S. trust classification and Rev. Proc. 2020-17 status require analysis. Auto-enrolment means many U.S. persons working in Ireland may have foreign trust obligations they are not aware of. The exemption is available only to an ‘eligible individual’ under §5.02: someone who is compliant (or comes into compliance) with U.S. income-tax filing and has reported the plan’s contributions, earnings, and distributions as income to the extent U.S. law requires; a participant who never reported plan earnings cannot rely on it until they do.

Convert euros at the rate prevailing when each amount is received, paid, or accrued; the IRS has no official exchange rate and generally accepts any posted rate used consistently, so its published yearly average rate is a common choice for amounts arising evenly across the year.