GeoffreyG
New Member

Deductions & credits

Hello yunliangchen:

Thank you for the additional information.

If your foreign Social Security benefits are non-taxable by treaty, then you can simply fill out Form 4852, include the full gross distribution amount (in US dollars) of the benefits received in Box 8a, but then in Box 8b you would enter $0.  Normally, a separate tax treaty benefit claim needs to be included with your tax return (by filing Form 8833) to take such a treaty-based tax position.  However, where the excluded foreign income is simply a result of pension or foreign social security, then Form 8833 is not required, per the IRS.  Please see the section titled "Exceptions" at the following IRS.gov webpage for confirmation of this fact:  <a rel="nofollow" target="_blank" href="https://www.irs.gov/individuals/international-taxpayers/claiming-tax-treaty-benefits">https://www.ir...>

In short, this provides the taxpayer with a neat and easy way to "report" (or "disclose") foreign social security income without having to also file Form 8833 (which is not included in TurboTax).

The second part of your question is somewhat more problematic.  In order to accomplish this correctly, and change Modified Adjusted Gross Income for the ACA credit calculation, you would need to be working in a desktop version of TurboTax (not online).  Next, the user would open up the tax return with the desktop Forms Mode of the program.  Then the MAGI figure would be manually overridden in the Form 8962 (a.k.a. Affordable Care Act Premium Tax Credit) calculation, just for the express purpose of figuring the allowable Form 8962 tax credit.

While that can certainly be done by an expert TurboTax user, admittedly the TurboTax program is not designed to handle such a contingency easily, or online.  For that, we apologize.

Thank you again for your inquiry.