Foreign social security

Barco
Barco Member Posts: 7 Newcomer
in Retirement Income

How to report foreign social security when there is no tax forms from Croatia, they just don't issue any. Checking around got several different options: to make substitute 1099-R OR add it to Sch 1 , under 8-z and describe what it is OR under Other reportable income. I assume there are many people in same situation and it's strange that there's no directions for it, when there's no Treaty with USA . I've read several advises from different communities and there are always several options. I do understand that reported income will be the same and taxed  the same if filed on any of those substitute Forms but it would be nice to know what is CORRECT way. Also, if filing manually and mail tax return  it's again an issue as there's no form to fill anyway! Thanks

Answers

  • JanaA
    JanaA FreeTaxUSA Agent Posts: 145 image
    edited February 27

    Hello Barco! Unfortunately, FreeTaxUSA currently only supports foreign social security income from Canada and Germany. Since your social security benefits are from Croatia, we are not currently able to support your filing situation.

    To answer your general question, the IRS does address the taxation of foreign social security benefits. According to the IRS, "absent application of a particular treaty provision, foreign social security pensions are generally taxed as if they were foreign pensions or foreign annuities." Since there is no US-Croatia tax treaty currently in effect, the income would generally be fully taxable in the US. You can find more detail on the IRS website here: www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

    For the specific question of which line or form to use, that is a nuanced area where a tax professional familiar with foreign income reporting would be best suited to advise you, as the correct approach can depend on the nature of the payments and your individual situation.

  • Barco
    Barco Member Posts: 7 Newcomer
    edited February 27

    Thank you, hard to get that issue solved and e-file. Not sure what to do with reporting that money online, just monthly amounts to US bank and that's all it is and need a place where to report it on any online software. Looks like it's something very special and I cannot believe it.I've read IRS about it but no instructions how to do it when there's no tax treaty. might even call them.

  • TaxMorgan
    TaxMorgan FreeTaxUSA Agent Posts: 104 image
    Hello,

    Yes, this does sound like a tricky situation.

    The IRS may be able to assist you. You may also want to reach out to a local tax professional who has experience with foreign income reporting and could help you with your return.
  • Barco
    Barco Member Posts: 7 Newcomer

    Thank you!

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