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Foreign social security benefits

happyheron

Do we report them on form 1040, on line 6a, like US social security benefits, or on line 8 as additional income from schedule 1 line 10?

I have dual citizenship and live in the US, and will receive social security from Switzerland and from the USA. Not sure how the Swiss social security will be reported and taxed.

Thank you.

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Accepted answers

MatthewD

Hi happyheron,

Some foreign counties will report their social security paid to a US resident on a 1099 form. However, Switzerland does not.

You have two options.

Report it as Other Income.
The other option, which is recommended, is to report it as retirement income on the Retirement Income page so that it is reported as Pension Income. However, you don't have a 1099-R form, so I have included some guidelines below on how to enter it.

To report it as pension income without a 1099-R, go to the Retirement Income page, start a 1099-R. Enter the Foreign Address, report the full amount in box 1 and 2a and the box 7 code as 7.

Also, if you have a foreign bank account you may need to report that on the FBAR/Form 8938. See the MISC menu in the software.

For information for the taxation of dual citizens. See this IRS page:

Taxation of dual-status individuals | Internal Revenue Service

TriciaD

Hello happyheron,

Foreign social security income is generally reported on line 6b of Form 1040, where it is combined with any U.S. social security benefits. If you need to report foreign social security benefits, please note that our software does not currently support this feature, and you will need to use an alternative filing method.

JMSSGV

https://community.freetaxusa.com/discussion/comment/7065#Comment_7065

Disagree. It should be reported as Other Income and identified by the type of payment. Only US Social Security should be reported on line 6.

MatthewD

Hello Community,

I just wanted to chime in here. I recommend reading this IRS Article on the taxation of foreign pensions and annuities.

https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

All comments

TaxMorgan

Hello happyheron,

Thanks for your question. For U.S. citizens (which includes dual citizenship), the IRS requires all worldwide income to be reported on a U.S. tax return. This would include your Swiss social security.

You may be able to take a credit or deduction for the taxes paid on your Swiss social security.

Foreign income taxes paid can be taken as a credit on Form 1116 or as an Itemized Deduction on Schedule A. The Foreign Tax Credit is generally the better option since a credit will usually reduce your tax liability dollar for dollar. You may take a deduction for foreign taxes paid on line 6, Schedule A.

Our software only supports the foreign tax credit when the foreign income and taxes are reported on a K-1, Form 1099-INT or Form 1099-DIV. If you have paid foreign income taxes on income (such as your Swiss social security) other than interest or dividend income reported on one of those two forms, FreeTaxUSA does not support that at this time.

happyheron

Thank you Morgan,

I would like to know where I have to report this income on form 1040. Is is on line 6a, like US social security benefits, or on line 8 as additional income from schedule 1 line 10?

There are no Swiss taxes on that income for people who live in the US.

Thank you

MatthewD

Hi happyheron,

Some foreign counties will report their social security paid to a US resident on a 1099 form. However, Switzerland does not.

You have two options.

Report it as Other Income.
The other option, which is recommended, is to report it as retirement income on the Retirement Income page so that it is reported as Pension Income. However, you don't have a 1099-R form, so I have included some guidelines below on how to enter it.

To report it as pension income without a 1099-R, go to the Retirement Income page, start a 1099-R. Enter the Foreign Address, report the full amount in box 1 and 2a and the box 7 code as 7.

Also, if you have a foreign bank account you may need to report that on the FBAR/Form 8938. See the MISC menu in the software.

For information for the taxation of dual citizens. See this IRS page:

Taxation of dual-status individuals | Internal Revenue Service

happyheron

https://community.freetaxusa.com/discussion/comment/6414#Comment_6414

Thanks a lot, Matthew.

Erja

I have dual citizenship and live in switzerland, and will receive social security from Switzerland and from the USA. Not sure how the Swiss social security will be reported and taxed in the US IRS 1040

TriciaD

happyheron

https://community.freetaxusa.com/discussion/comment/7065#Comment_7065

Good to know.

Thank you, Tricia

JMSSGV

https://community.freetaxusa.com/discussion/comment/7065#Comment_7065

Disagree. It should be reported as Other Income and identified by the type of payment. Only US Social Security should be reported on line 6.

MatthewD

Hello Community,

I just wanted to chime in here. I recommend reading this IRS Article on the taxation of foreign pensions and annuities.

https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

fitbaw

https://community.freetaxusa.com/discussion/comment/6447#Comment_6447

Matthew, so I tried the dummy 1099-R route for my UK Military pension, dual citizen living in the US, I get paid monthly into my US account after it gets converted to $,s. it's only about $1,900 for the year. It's insisting on a Payer's ID Number in an EID format which of course doesn't exist. How do I get around that? I'm thinking about just popping it in the Other Income thing instead.

fitbaw

https://community.freetaxusa.com/discussion/comment/6447#Comment_6447

MidAtlantic

Using all 9s should work