@gciriani wrote:
I'm in your same situation, probably a different tax-treaty country (full list here), and made the following determination.
My Tax Treaty (US-Italy) says that my Italian pension coming from the Italian state should be treated exactly like social security coming from Italy, and that should be taxed only in the US because I'm a resident of the US not Italy. T
@gciriani
IRS guidance expressly says foreign social security benefits "are not eligible for exclusion from taxable income the way a U.S. social security pension might be unless a tax treaty provides for an exclusion." https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions
Where in the Treaty do you get that the Italian pension "should be treated exactly like social security?"
I see Article 18(2), which says it should be taxable to the resident state.
I also see I.R.C. 86, which taxes social security benefits differently from other retirement benefits and expressly defines social security benefits as a benefit received under the US Social Security Act or tier 1 railroad retirement benefit. 86 (d) (1). https://www.law.cornell.edu/uscode/text/26/86
So I'm just not seeing how they get favorable US tax treatment (being like us SS benefits). What am I missing?
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