Foreign government grants classification

Hello,

 

US expat received from the foreign government child support funds. The income at the foreign country is taxable, taxes have been paid (withheld by the foreign tax authority). How would you classify it in the tax return? It is not wages or salary and may not be excluded as foreign earned income?   

pk
Level 15
Level 15

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@shachar183 which country are  you employed/ living in? Is it something that every child gets or is this with some conditions?  Are you employed by a local entity or by US govt. ?

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No, child support payments are NOT considered foreign earned income, and they should be excluded from your US tax return.  Though it may be different in the country of origin in your case,  child support payments are not considered taxable income in the U.S. and do not give rise to a taxable event.

 

 

@shachar183

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Sorry I maybe named it wrong.
In Israel, the government makes it up for individuals on paternity/maternity live and grant social security payments as a replacement of wage/salary. Those are taxed. It is 70% of your average salary with a certain limit.

It is called in 'Child support social security benefits' in Hebrew.

Topic 54 mentions social security benefits as unearned income which could be excluded. What do you think? Exclusion of foreign earned income and form 2555 may apply here?

 

Thanks,