pk
Level 15
Level 15

Retirement tax questions

@Lukas1994 having gone through this thread and appreciating the responses of my colleagues @rjs  and @Opus 17 ,  I would like to include here the actual /pertinent treaty article  paragraph and the technical explanation thereof  ( I have added the contracting state applicable in this situation -- underlined italic )

Article 19  of treaty

 Paragraph 2              Social security benefits paid under the social security legislation of a Contracting State     ( Germany ) and other public pensions (not dealt with in paragraph 1)  paid by a Contracting State    (Germany ) to a resident of the other Contracting State  ( USA ) shall he taxable only in that other Contracting State ( USA ). In applying the preceding sentence, that other Contracting State  (USA) shall treat such benefit or pension as though it were a social security benefit paid under the social security legislation of that other Contracting State (USA).

Technical Expl.  Article 19

Paragraph 2 deals with the taxation of social security benefits and similar public pensions. This includes the benefits paid under the social security legislation of both Contracting States and certain U.S. Railroad Retirement benefits. It does not include pensions for government service, which are dealt within paragraph 1. Under paragraph 2, such benefits paid by a Contracting State to a resident of the other Contracting State are taxable only in the State of residence of the recipient. In applying its tax, the State of residence will treat the benefit as though it were a benefit paid to a resident under its own social security system.

 

Thus the bottom line of all this is that you cannot use 1099-R mechanism for recognizing German Social Security equivalent -- must include this amount as additional US Social Security distribution ( i.e. it must be included for SSA taxability computation --- line 5a of form 1040 ).

I am assuming here that you are a US person( citizen / GreenCard ) and that your tax-home is US.

 

Is there more I can do for you ?

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