@gciriani while I applaud your effort in researching this subject ( whether foreign social security / equivalent needs to be treated as a pension/annuity and reported on 1099-R equivalent ), I disagree with your conclusions.
Here are my reasons : I am just quoting from US-Italy Tax treaty and pub 915 . I have highlighted some portions:
US-Italy Tax Treaty of 1999
Article 18
- Payments made by a Contracting State under provisions of the social security or similar legislation of that State to a resident of the other Contracting State shall be taxable only in
the other State.
Technical Explanation –US-Italy Tax Treaty 1999
Article 18
Paragraph 2 The treatment of social security benefits is dealt with in paragraph 2. As in the prior Convention, but unlike the U.S. Model, this paragraph provides that payments made by one of the Contracting States under the provisions of its social security or similar legislation to a resident of the other Contracting State will be taxable only in the other Contracting State. This paragraph applies to social security beneficiaries whether they have contributed to the system as private sector or Government employees. The phrase "similar legislation" is intended to refer to United States tier 1 Railroad Retirement benefits
Pub 915
Page 5
U.S. citizens residing abroad. U.S. citizens who are residents of the following countries are exempt from U.S. tax on their benefits. • Canada. • Egypt. • Germany. • Ireland. • Israel. • Italy. (You must also be a citizen of Italy for the exemption to apply.) • Romania. • United Kingdom
Page 6
Canadian or German social security benefits paid to U.S. residents.
Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States. If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1
Note that except for pub 915 ( which deals with Social Security and RRB ), the treaties themselves deal ONLY with taxability and NOT how to treat the income ( i.e. whether under Social Security rules or under "pension" rules).
I definitely enjoy this discussion. What I don't know is whether this is right forum or we should do this as PM
pk
