Should I declare social security pension on both US and Canadian tax returns?

[connienelsontink]

my deceased husband retired in Canada and was a Canadian citizen who worked in the US and was eligible for SS benefits. We file tax returns for both countries. How do I report the pension on the US return and avoid double taxation?

[DianeW · Accepted solution]

No, you do not declare the social security benefits on both returns. The IRS Publication 915 as well as the one shown below confirm it. U.S. social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax. 

• IRS Publication 597-US & Canada Income Tax Treaty

You would not include your US Social Security benefits on a US federal tax return when those benefits are being reported on the Canadian tax return. 

[WT6]

Correct, but unfortunately IRS Pub 915 states:

"Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040 or 1040-SR, line 6a. Enter -0- on Form 1040 or 1040-SR, line 6b."

TurboTax's "solution" is to tell you not to report your SS income if you're a U.S. citizen/Canadian resident. But the technically correct approach would be the above. Unfortunately, TurboTax has no way to report the income on line 6a, and then zero it out on line 6b as the IRS instructs.  To do this, an override is required, which makes it impossible to eFile.  Whether the IRS would actually flag someone who failed to report the income on line 6a, I have no idea.  It would make no difference in the final calculations, but that doesn't guarantee your return won't be scrutinized because of the omission.  Asking TurboTax to deal with issues like this is pretty much like barking into the void, so I doubt it will ever be fixed.  Leaving the choice of not reporting the income, or sending in a paper return.