should I report my german pension received from the drv on form 1099 or 1099-R? The ai gives both alternatives.

[Lukas1994]

1. Question to AI: “Is DRV pension treated like social security?” Answer: “German Social Security benefits paid to US residents are generally treated as if they were paid under the US Social Security system. This means that the income is not considered a Form 1099-R distribution (for pensions) but rather as Social Security benefits reported on an SSA-1099.” 2. Question to AI: “How is DRV pension reported in federal tax return on turbo tax? Answer: “Reporting pension income in TurboTax, especially a foreign pension like the DRV (Deutsche Rentenversicherung) pension from Germany, generally involves using the information from your Form 1099-R or entering the information manually if you do not have a 1099-R”

[rjs]

AI is not a reliable source. All AI systems sometimes give false information. You have seen that you got conflicting answers from AI.

Enter your German old-age pension in TurboTax as if it was reported in box 5 of a Form SSA-1099, just like U.S. Social Security. You must convert the amount to U.S. dollars.

[Opus 17]

We need to consult expert @pk

In general, if there is a tax treaty with the other country, there are two ways to handle government social benefit payments that are like Social Security.

1. Follow the treaty.  This generally means that you must report the benefit and pay tax to the home country following the home country's tax laws, and leave the benefit off your US return completely.

2. Ignore the treaty.  Report the benefit on your US tax return as "other income" and ignore any requirements you have in the home country.

So it depends on how the benefit would be taxed if you filed a return in Germany vs how much it is taxed in the US.  And, if the tax treaty with Germany follows these general rules or different rules.  You should discuss this with an expert. 

[pk · Accepted solution]

@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 ?

[rjs]

@Lukas1994 

@pk meant to say that the German Social Security must be included in line 6a of Form 1040, not line 5a. Line 6a is for Social Security benefits. You get it on line 6a by including it (converted to U.S. dollars) in your entry in box 5 of Form SSA-1099.

[pk]

@rjs  thank you fort catching that error -- it is the SSA line  box 6a and NOT 5a

[Lukas1994]

thank you, @Champ and other responses; I believe AI received its "1099-R" answer from the TurboTax software where you can fill out a substitute form 1099-R with all details (Address, Federal ID, Taxable amout, etc. etc.) on line "IRA, 401K, pension withdrawals" whereas reporting it on line "Social Security SSA 1099" (box 5 on form SSA-1099) you need to manually add the converted EUR amount into USD and add it to the US SS. There are no additional forms to support the entry, no address, no ID, and, in general, no audit trail. Wouldn't this require a correction of the TurboTax Software? 

Thank you all for your responses.

[rjs]

It doesn't matter how the AI came up with its wrong answer.

No correction to the software is needed. Including the German Social Security amount in box 5 of Form SSA-1099 has been the common practice in TurboTax and other tax software for many years.

If you are using the desktop TurboTax software, you can use Supporting Details in box 5 to enter the U.S. and German amounts separately if you prefer to do that. Box 5 will then show the sum of the two entries. I don't think Supporting Details is available in TurboTax Online.

[pk]

@Lukas1994 agreeing with my colleague @rjs , supporting details in forms mode works -- I just tried and it works -- multiple line entries and the amount is summed and entered on line 6a of form 1040. Passes all tests performed  by TurboTax and ready for filing.

Is there more one of us can do for you ?

[rjs]

"supporting details in forms mode works"

It works in the Step-by-Step interview, too, but not quite as conveniently. Click on the box 5 entry box, then on the Edit menu select "Add Supporting Details."