Hello,
I moved from Switzerland to the US in June 2024 on a K-1 non-immigrant visa, and became a US tax resident under the substantial presence test. I received my green card in November. In July, I received a lump sum payout from a Swiss public sector pension fund and a final salary payment for government service. Both were taxed at source in Switzerland.
Under Article 19(2)(a) of the US–Switzerland tax treaty, government pensions are taxable only by the source country. Article 1(3)(b) states the saving clause does not override this for individuals who are neither US citizens nor hold immigrant status. At the time of payment in July, I had not yet received a green card.
Since I was not a US citizen or green card holder at the time of receipt, does the treaty protection apply and can I claim an exemption form US taxation? However, the treaty and technical explanation are not explicit on whether immigrant status applies retroactively which would mean that the saving clause applies to the full resident period if immigrant status is acquired later in the same year?
I am unsure by which interpretation to go by. Has anyone encountered this dual-status scenario and taken the position that the exemption holds because immigrant status began after payment was received?
Thank you for your help in advance!
