US Tax Treatment of Superannuation Earnings
In practice, many Australian expats in the US have not reported their Australian superannuation holdings, or superannuation income, in their US tax returns - simply believing that it was unecessary to report find earnings to which they have no present entitlement, much as with domestic US 401(k) plans and IRAs. Unfortunately, the situation is not that simple and US-Australia double tax treaty does not include a tax deferral provision which would effectively allow superannuation to be clearly treated as if it were a US qualifying fund.
When expats have approached US tax advisers, the typical response has often been that superannuation should be considered as a "foreign grantor trust", because superannuation funds are intrinsically trusts. If that advice were followed, then earnings within super would need to be included in US tax returns and potentially other returns such as FBAR and FATCA.
We need to stress that very few US tax advisers have an in-depth understanding of either the intricacies of superannuation or the Australian/US double tax agreement and this is an innately complex area. However, our US international tax attorney does not take the view that earnings within superannuation are taxable in the US and expats are urged to discuss the matter with him prior to determining their approach to the matter.
Conversely, expats with international employers should seek clarification of their position, if it hasn't already been provided. Specialist tax advice is absolutely recommended in these circumstances.