US taxes on the departing Australia superannuation payment (DASP): 2026 guide

US citizens and green card holders who received a DASP in 2025 generally address it on their 2025 Form 1040 filed in 2026. The gross payment and taxable amount are not always identical – IRS guidance generally permits recovery of documented after-tax cost, while Australian withholding may support a Form 1116 foreign tax credit. (IRS)

The Departing Australia superannuation payment (DASP) lets an eligible temporary resident access Australian super after leaving Australia and allowing the relevant visa to expire or be canceled. Australian tax is normally withheld at 0%, 35%, 45%, or 65%, depending on the payment component and whether the recipient held a Working Holiday Maker visa. (Australian Taxation Office)

For the 2025 tax year, most calendar-year returns were due April 15, 2026. Qualifying taxpayers abroad received an automatic extension to June 15, 2026, and a properly requested extension may provide until October 15, 2026 to file, although interest on unpaid tax normally runs from April 15. (IRS)

Australian super on your 2025 US return? Get clear filing next steps.

Learn more

What is the departing Australia superannuation payment (DASP)?

A DASP is a lump-sum payment of Australian super available to eligible temporary residents after they leave Australia and their visa ceases. Australia withholds 0%–65% depending on the payment component and visa history. US taxpayers must report the distribution, but documented US basis may reduce the taxable portion. (Australian Taxation Office)

DASP – the Departing Australia Superannuation Payment – is the process used to get your superannuation back after temporary employment in Australia. It is not a refund of every Australian tax paid; it is a withdrawal from a retirement account, less the applicable Australian withholding tax.

A DASP received by a US taxpayer is reportable in the year received, but the taxable amount is generally the gross distribution minus documented US tax basis – not automatically 100% of the payment. IRS guidance states that foreign pension income may be fully or partly taxable, depending on the recipient’s investment in the contract. (IRS)

The ATO's departing Australia superannuation payment rules apply to temporary residents who satisfy the departure and visa conditions. The ATO’s official DASP guidance explains eligibility, payment components, and the withholding process. (Australian Taxation Office)

A withdrawal of superannuation in Australia does not receive the same US treatment as a tax-free domestic retirement rollover. For broader context on US tax on Australian superannuation, review our updated guide to Australian superannuation and US taxes.

Who is eligible to claim DASP?

To claim DASP, a former worker must satisfy 5 core conditions: they held an eligible temporary visa, accumulated Australian super, left Australia, allowed the visa to cease, and are not an Australian or New Zealand citizen or an Australian permanent resident. Permanent visa holders in Australia ordinarily cannot use DASP. (Australian Taxation Office)

The following 5 conditions generally determine whether an Australian super claim qualifies:

• You held a temporary resident visa in Australia, rather than Australian permanent residency or citizenship.
• Your temporary visa has expired or been canceled.
• You have departed Australia.
• You are not an Australian or New Zealand citizen or Australian permanent resident.
• A super fund or the ATO holds contributions from your Australian employment.

Claiming super is not available merely because you stopped working or moved to another Australian state. Your departure and visa status must be confirmed before the ATO DASP system will submit the application to the relevant fund. (Australian Taxation Office)

A super claim can include employer contributions, personal contributions, allocated earnings, and ATO-held unclaimed super. Read our guide to the US tax effects of Australian superannuation before completing the superannuation claim.

Working Holiday Maker visa holders generally face a 65% DASP rate on taxable components, compared with 35% or 45% for other eligible temporary residents. The 65% rate can apply if the person held a subclass 417 or 462 visa, even if another temporary visa was also held. (Australian Taxation Office)

 

How to claim your DASP: Step-by-step process

The ATO’s DASP online system accepts applications for money held by super funds and the ATO, regardless of whether the balance is above or below AUD 5,000. That threshold concerns whether a fund may request certified identification documents – it does not determine the application channel. (Australian Taxation Office)

The following 5 steps cover the application for departing Australia superannuation payment:

1. Locate every account. Use myGov, previous statements, former employer records, or the ATO DASP online system. Supplying your tax file number lets the system search ATO records for identified funds and ATO-held money. (Australian Taxation Office)
2. Confirm departure and visa status. Home Affairs must confirm that you have left Australia and the relevant visa has ceased. You may save an application while the visa remains active, but you cannot submit it to the fund. (Australian Taxation Office)
3. Choose online or paper filing. You may apply for departing Australia superannuation payment online or use the Departing Australia Superannuation Payment form, NAT 7204, for a fund-held balance. The AUD 5,000 amount affects possible document-certification requirements, not your right to apply for superannuation online. (Australian Taxation Office)
4. Provide the requested records. The ATO superannuation claim system asks for passport details, email, visa information, account details, and the super fund’s Australian Business Number. A fund may request extra identity or banking records.
5. Receive the net payment. The fund or ATO deducts DASP tax before sending the balance. Payment is generally made within 28 days after the fund or ATO has the completed application and all required information. (Australian Taxation Office)

Most completed claims are processed within a 28-day service period, but missing identity or account records can restart or delay that period.

The ATO DASP system is the correct place to apply for a superannuation refund in Australia online. Searches such as departing superannuation payment in Australia online, ATO super claim, ATO superannuation claim, and apply for a superannuation refund in Australia online refer to this same official process.

DASP Australian tax rates: What gets withheld before you see a dollar

Australian DASP tax is deducted before the payment reaches you. For a non-WHM claimant, the tax-free component is withheld at 0%, the taxed element at 35%, and the untaxed element at 45%. A Working Holiday Maker’s taxable components are generally withheld at 65%. (Australian Taxation Office)

The DASP super tax rate ranges from 0% to 65%, based on the component shown in the fund’s payment calculation.

 

The DASP Australia tax calculation is completed by the fund or ATO. This withholding tax on DASP is final for Australian purposes, and the claimant normally receives the net amount plus a DASP payment summary showing the gross components and tax deducted. (Australian Taxation Office)

A Working Holiday Maker can lose 65 cents of each taxable dollar to Australian withholding, but the US return must still start with the gross distribution before withholding. The US taxable portion is then determined separately under US rules.

The departing Australia superannuation payment tax should not be calculated from the bank deposit alone. Keep the payment summary because a net AUD 14,000 receipt could represent a much larger gross distribution after DASP tax.

How the IRS treats your DASP payment: US tax rules explained

For a 2025 DASP, IRS foreign pension guidance generally starts with the gross distribution and subtracts eligible US tax basis to determine the taxable amount. The distribution is not automatically tax-free, but neither IRS guidance nor the 2025 Form 1040 instructions state that every foreign pension payment must be taxed at 100%. (IRS)

Australian super is not a qualified US retirement plan under Internal Revenue Code Section 401(a). Its precise superannuation US tax treatment depends on the fund structure, employer and employee contribution history, prior US reporting, and whether earnings or contributions were already included in US taxable income.

Report the total DASP distribution on 2025 Form 1040, line 5a, and the taxable portion on line 5b after completing a supportable basis analysis. The 2025 instructions direct taxpayers to use these lines for lump-sum pension and annuity distributions. (IRS)

Based on our client scenario at TFX: A taxpayer receives a USD 50,000 gross-equivalent DASP and has USD 20,000 of documented US tax basis. In a simplified calculation, USD 30,000 remains taxable; at a 24% marginal rate, that produces USD 7,200 of federal tax before any allowable foreign tax credit.

That calculation is illustrative because foreign pension reporting may require a year-by-year review of contributions and earnings. Read our guide explaining when foreign pension income is taxable in the US.

The US taxation of DASP is part of a wider foreign pension reporting analysis. The same review may also identify separate FBAR, Form 8938, foreign trust, or PFIC questions based on the particular fund and its investments.

Not sure if your Super is fully reported? Let us check & ensure it aligns with IRS requirements.

Learn more

Does the US-Australia tax treaty protect your DASP from double tax?

Article 18 of the US-Australia treaty defines covered pensions and similar remuneration as periodic payments made because of retirement or death. A one-time DASP does not fit that wording neatly, and the treaty’s Article 1 saving clause generally permits the US to tax its citizens as though the treaty were not in force. (IRS)

The treaty does not provide a clear exemption that makes a DASP tax-free for a US citizen.

An IRS Chief Counsel memorandum concluded that an Australian superannuation payment to a US citizen was subject to US tax under the treaty. That memorandum involved a death benefit, is not precedent, and does not determine every DASP case, but it shows how the IRS applies the saving clause to Australian super. (IRS)

The tax treaty article on retirement income therefore does not remove the need for a domestic-law basis calculation. For current background on Australia-US treaty benefits, see our US-Australia tax treaty guide.

Relief from double taxation on superannuation usually comes through the foreign tax credit rules, not an exclusion of the distribution. The allowable credit still depends on whether the Australian charge is a creditable income tax, the source and category of the income, and the Form 1116 limitation.

Claiming the foreign tax credit on your DASP: Offsetting Australian withholding

Australian DASP withholding of 35%, 45%, or 65% may support a Form 1116 credit, but the credit is not automatically equal to the amount withheld. The tax must qualify under US rules, and the allowable credit cannot exceed the US tax attributable to the relevant foreign-source income category. (IRS)

Form 1116 can reduce double tax on DASP, but it permits only qualified foreign tax within the applicable US limitation.

Based on our client scenario at TFX: A non-WHM claimant receives an AUD 40,000 gross taxed element, and Australia withholds AUD 14,000 at 35%. Convert the distribution using the exchange rate on the date received and the withholding using the rate on the date the tax was withheld; the IRS 2025 yearly average of AUD 1.551 per USD is not the default rate for a one-time payment. (IRS)

The return reports the gross distribution and calculated taxable portion on Form 1040. The preparer then analyzes whether the USD 9,026 Australian charge qualifies as a foreign tax credit for superannuation and which Form 1116 basket applies.

The IRS states that an amount withheld is not necessarily the amount eligible for credit. If foreign law or a treaty entitles the taxpayer to a lower tax or refund, only the legal and actual foreign tax liability is generally creditable. (IRS)

 

 

See our Form 1116 filing guide for the calculation steps. Our guide to the foreign tax credit carryover explains what happens when current-year Australian tax exceeds the allowable credit.

Where to report DASP on your US tax return

For a DASP received in 2025, enter the total gross distribution on Form 1040, line 5a, and the taxable portion on line 5b. Do not use the net Australian bank deposit, and do not automatically place the payment on Schedule 1, line 8z. (IRS)

The following 4 steps connect the Australian payment summary to the 2025 US return:

1. Convert the gross distribution to US dollars. Use a supportable exchange rate and retain the source in the workpapers.
2. Complete the basis calculation. Enter the gross pension or annuity distribution on line 5a and the taxable amount on line 5b.
3. Prepare Form 1116 when applicable. Report only qualified Australian tax and apply the foreign tax credit limitation.
4. Review estimated-tax exposure. A lump sum can produce an underpayment penalty when expected tax due after withholding and refundable credits is at least USD 1,000 and the applicable 90%, 100%, or 110% safe harbor is not met. (IRS)

Report the pre-withholding distribution on line 5a even though the claimant received a smaller net payment.

Our guide to where foreign income appears on Form 1040 covers the other common categories. For this article, IRS Form 1040 foreign income reporting means using the pension lines rather than the general “other income” line.

FBAR and Form 8938 reporting for Australian superannuation accounts

An Australian super account may require an FBAR when the aggregate maximum value of all foreign financial accounts exceeds USD 10,000 during the calendar year. Form 8938 has separate thresholds – for qualifying taxpayers abroad, USD 200,000 at year-end or USD 300,000 during the year for a non-joint filer. (IRS)

FBAR and Form 8938 are separate filings, so meeting both thresholds can require reporting the same super account twice.

For a married couple filing jointly and qualifying as living abroad, the Form 8938 thresholds are more than USD 400,000 at year-end or more than USD 600,000 at any point. US-based thresholds are much lower, beginning at USD 50,000 at year-end for an unmarried filer. (IRS)

FBAR superannuation reporting uses FinCEN Form 114 and the account’s maximum annual value. Form 8938 superannuation reporting is attached to the income tax return and uses its own valuation and filing rules.

The latest FinCEN inflation table located as of July 29, 2026, lists a maximum nonwillful FBAR penalty of USD 16,536 for penalties assessed on or after January 17, 2025. Actual assessment depends on the facts, reasonable cause, applicable law, and enforcement discretion. (Federal Register)

The old USD 10,000 statutory figure is not the current inflation-adjusted maximum in FinCEN’s latest published table.

After DASP closes the account, the account is not reported for later years in which you no longer hold an interest. The year of payment or closure can still require reporting based on the maximum value before the balance was distributed.

US expats reporting foreign retirement accounts should compare both regimes. See how FBAR differs from Form 8938 before filing.

FATCA implications for Australian superannuation: What changed?

Australia’s FATCA agreement generally excludes qualifying Australian retirement funds, including superannuation funds, from fund-level FATCA reporting. That exemption does not cancel a US account holder’s own Form 8938 obligation when specified foreign financial assets exceed the applicable USD 50,000-USD 600,000 threshold. (Australian Taxation Office)

A super fund’s FATCA exemption and the member’s Form 8938 duty are 2 different rules.

The Australia-US IGA treats covered retirement plans as deemed-compliant foreign financial institutions or exempt beneficial owners. The ATO also states that Australian retirement funds, including self-managed superannuation funds, are excluded under the FATCA classification rules. (Treasury)

A claimant should not assume that the IRS receives an annual FATCA report directly from every Australian super fund. The safer and more accurate statement is that individual reporting remains required when US thresholds and asset definitions apply, regardless of the fund’s own status.

Our earlier article on FATCA implications for Australian superannuation provides historical context. Its 2014 discussion should be read together with the current IGA exemptions and the updated Australian superannuation tax guide.

Can you use the Foreign Earned Income Exclusion to reduce DASP tax?

The Foreign Earned Income Exclusion applies to qualifying income from personal services, not a retirement-fund distribution. Although the maximum 2025 exclusion is USD 130,000 per qualifying person, Form 2555 cannot exclude a DASP because the payment is not compensation for work performed during the qualifying period. (IRS)

The 2025 Foreign Earned Income Exclusion cannot shelter a DASP distribution from US tax.

A taxpayer who earned Australian salary during 2025 may still use Form 2555 for eligible wages and Form 1116 for separately classified DASP income. Foreign tax paid on income excluded through Form 2555 cannot also produce a foreign tax credit, so income and tax allocations must not overlap. (IRS)

Read our comparison of the Foreign Tax Credit and Foreign Earned Income Exclusion before combining the 2 methods on one return.

How currency conversion affects your DASP reporting

For a 2025 DASP, use the exchange rate prevailing on the date you received the distribution. Convert Australian tax withheld using the rate on the date the tax was withheld; the IRS 2025 yearly average of AUD 1.551 per USD generally applies only when an average rate is otherwise permitted, such as for certain accrued foreign taxes. (IRS)

The official 2025 average converts AUD 35,000 to approximately USD 22,566 – not USD 22,225.

Based on our client scenario at TFX: A client received an AUD 35,000 DASP in March 2025. The client should convert the payment using the exchange rate on the exact receipt date and keep the rate source with the return records.

Use the same conversion method for the gross payment and related Australian tax. Mixing an annual average rate for income with a different undocumented rate for withholding can distort the Form 1116 result.

The IRS does not mandate one exchange-rate source for every transaction, but the chosen method should be reasonable and consistently applied. Keep the ATO payment summary, bank record, rate source, and calculation with the 2025 return records. (IRS)

Locating lost or forgotten Australian super before you claim DASP

Before filing DASP, check every fund and ATO-held balance linked to your employment history. Australian officials cited AUD 21.5 billion in lost and unclaimed super at the end of 2025, so locating even 1 forgotten account can materially change the gross distribution and US reporting. (Australian Taxation Office)

The following 4 checks can identify super before the application is submitted:

1. Review myGov. Link the ATO service and check the listed super accounts when you retain access.
2. Use the DASP online search. Providing a tax file number allows the system to search ATO records for identified super funds and ATO-held money. (Australian Taxation Office)
3. Contact former employers. Ask which fund received contributions and obtain the fund name, member number, and Australian Business Number.
4. Check ATO-held super. Money transferred from an inactive fund may appear in the online DASP process and remains subject to the applicable DASP withholding when paid.

The ATO super refund process may produce separate payments from multiple funds rather than one combined deposit. Keep every payment summary because each document may show different tax-free, taxed, and untaxed components.

A superannuation refund is still a reportable distribution for US purposes when received by a US citizen or resident. The ATO Australia superannuation refund label does not turn the payment into a nontaxable US refund.

FREE

Australian super in more than 1 fund? Get clear filing and catch-up steps.

Get started today

Schedule my free call

What if you never reported your Australian super?

Qualifying taxpayers abroad may use the Streamlined Foreign Offshore Procedures to submit the most recent 3 delinquent or amended returns and 6 years of FBARs. Eligible nonwillful filers who follow the procedure are not subject to failure-to-file, information-return, or FBAR penalties covered by the submission. (IRS)

The 0% streamlined offshore penalty is available only when the taxpayer satisfies the foreign-residency test and signs a valid nonwillful certification.

The IRS foreign procedure generally requires the individual to have lacked a US abode and to have spent at least 330 full days outside the United States during at least 1 of the relevant 3 years. The package includes Form 14653, tax and interest due, required information returns, and electronically filed FBARs. (IRS)

US residents may need the Streamlined Domestic Offshore Procedures instead, which generally applies a 5% miscellaneous offshore penalty. Filing the wrong procedure or giving an incomplete nonwillful narrative can remove the favorable terms.

A missing super account may affect Form 8938, FBAR, income reporting, or multiple forms at once. See our guide to filing multiple years of back taxes as an American expat before submitting corrections.

Get help with your missed US tax filing

Learn more

DASP tax planning tips before you submit your claim

Before submitting DASP, review 4 items: the receipt year, estimated-tax exposure, payment-summary components, and every existing super account. A claim that crosses December 31 can move income into a different US tax year, while missing basis records can increase the amount treated as taxable. (IRS)

The following 4 actions can reduce filing errors and unexpected cash-flow problems:

• Review the claim year. When Australian law permits a choice of timing, compare projected US income for each calendar year before submitting the payment request. A lower-income year can produce a lower marginal rate, but the result depends on the taxpayer’s full return.
• Check estimated-tax rules. A DASP does not create a special AUD 20,000 payment threshold. The US trigger generally starts when expected tax due after withholding and refundable credits is at least USD 1,000 and the 90%, 100%, or applicable 110% safe harbor is not met. (IRS)
• Request the DASP payment summary. The fund’s record should identify the gross amount, taxable components, and Australian tax withheld. These figures support lines 5a and 5b, the basis calculation, and Form 1116.
• Locate every fund before applying. The ATO online process can send applications to multiple identified funds, so consolidation is not a prerequisite. Finding all accounts first is more important than transferring balances immediately before a permanent departure from Australia. (Australian Taxation Office)

 

 

Unused qualifying Australian tax may fall under the foreign tax credit carryover rules. Taxpayers making a future claim can also review TFX’s tax projection service before choosing the payment year.

DASP for US citizens vs. green card holders vs. nonresident aliens

US citizens and green card holders generally report worldwide taxable income, including a 2025 Australian super distribution. A nonresident alien usually reports only US-source income and effectively connected income, so a foreign-source DASP normally falls outside Form 1040-NR unless special sourcing, election, or business facts apply. (IRS)

US citizens and green card holders generally receive the same worldwide-income treatment, while a true nonresident alien has a narrower US tax base.

 

A US citizen claiming Australian super remains subject to US worldwide-income rules even after living outside the United States for several years. A green card holder normally remains a US tax resident until the status is formally ended or a valid treaty position changes the result. (IRS)

Former citizens and long-term green card holders require separate expatriation analysis. The payment date, status-ending date, covered-expatriate rules, and possible deferred-compensation or trust provisions can change the result.

File your DASP tax return with an expat tax team

A 2025 DASP return can involve at least 4 filings – Form 1040, Form 1116, FBAR, and Form 8938 – plus a historical basis calculation. The correct package depends on the gross payment, Australian withholding components, prior reporting, taxpayer status, and foreign-account values.

FREE

DASP income and US tax forms due? Let us help you with your IRS reporting.

Start with a free filing call today.

Schedule my free call