How do I report foreign social security payments?

[agtzc1961-gmail-]

I receive my pension from Mexico through their social security, I forgot to add it to my original  tax return now I need to amend

[Bsch4477]

Report as other income. 

• 
  Click Federal > Wages & Income>all income>
• Go to the last selection, Miscellaneous Income and click Start
• Go to the last option, Other reportable income and click Start
• When it asks, "Any other reportable income?" say yes and then type in a description and the amount to report it on your tax return. For the description, type in Foreign Social Security

[pk]

@agtzc1961-gmail- , agreeing with my colleague  @Bsch4477  on the process to report  foreign social security payments to an US person ( citizen/ GreenCard ), please not  that in this particular case the US-Mexico Tax treaty , under article 19 of the treaty declares as to which  contracting state  ONLY has the right to tax  this income -- see below :

"  ARTICLE 19
Pensions, Annuities, Alimony, and Child Support
1. Subject to the provisions of Article 20 (Government Service):
a) pensions and other similar remuneration derived and beneficially owned by a resident
of a Contracting State in consideration of past employment by that individual or another
individual resident of the same Contracting State shall be taxable only in that State; and
b) social security benefits and other public pensions paid by a Contracting State to a
resident of the other Contracting State or a citizen of the United States shall be taxable only in
the first-mentioned State.  "

Thus you DO NOT report the report the SSA  payments from Mexico to US -- Mexico has the right to tax these  incomes under its laws.

Does this make sense ?   Is there more I can do for you ?

pk

[David-TS]

Agree with Federal reporting method for foreign Social Security input but when using Turbo Tax for Delaware State how do I get around Turbo Tax calculating this is DE State taxable

[DaveF1006]

I agree with PK and that you do not need to report Mexican Social Security income on a US tax return because of the treaty provisions. If you exclude it, it won't appear as taxable income in your Delaware return.

If you reported it like Bsch4477 suggests, you would need to make a corresponding entry to offset the amount you reported. 

• Click Federal > Wages & Income>all income>
• Go to the last selection, Miscellaneous Income and click Start
• Go to the last option, Other reportable income and click Start
• You should be in a miscellaneous income summary screen
• Select add another income item .  Type in Mexican/American treaty benefits and offset the amount originally reported with a negative sign in front of the amount. 

This will remove the income both from federal income and Delaware income as well. 

[David-TS]

Thanks DaveF1006.  The "Social Security" payment I'm interested in (aka UK National Pension) is from the UK which I believe is subject to US Federal tax but not Delaware State tax.  I am basically asking the Turbo Tax program to observe Federal Tax requirements but not use the input value for the DE State calculation. 

To my knowledge the UK has not taxed the payment and I am not 100% sure if there is a Treaty provision in place.

[Bsch4477]

Add your UK social security payment in U.S. dollars to your US social security (if any) just the way you input social security into the program. The program knows that any social security reported is exempt from state tax so the entire amount escapes state tax. 

[DaveF1006]

Yes, thanks for clarifying this for us. Under the UK/US tax treaty, social security is taxable in the US thus should be handled like social security is handled. The problem is how to report this in a 1040 return. Not a problem however because i have a solution.

Report this is social security income in your federal return..  If you report vit in this manner, Delaware will automatically exclude the taxable social security amount in Section 8a of the Form PIT-RES.

To report:

1. Go to federal or federal income
2. Go to retirement plans and social security
3. Go to social security (SSA 1099 RRB 1099)
4. Report the social security payments in Box 5 of the form

@David-TS 

[tosei]

Thanks for the infomation.

I followed the steps to add and then offset the amount of foreign social security.  Then I got an error when filing electronically:

1040/1040SR Wks: Type of Other Income: Other Income write-in text should not be overridden and changed for Electronic Filing. Using an override can prevent the cross-checking that's important to an accurate tax return. To cancel the override, click on the overridden field and choose 'Override' from the Edit menu.
I prefer to file electronically, is there a way to avoid this error ?

Thanks!

[DaveF1006]

To clarify, what country are you excluding this income from?

[tosei]

I am excluding my social security benefits from China. 

[AmyC]

You want to make the changes using step by step rather than override in the Forms mode. To subtract the income:

1. Open to federal income
2. Locate Miscellaneous Income, 1099-A, 1099-C, Start
3. Scroll to the bottom
4. Other reportable income, Start
5. Other taxable income?
6. Select YES
7. Description nontaxable Social Security US-China treaty
8. Amount, enter your negative amount, use a minus sign in front.
9. Continue

@tosei

[tosei]

Hi @AmyC , thank you for the instructions. 

I followed the exact steps you posted, I got the same error message. If I delete the entries by using the step by step way, the error is gone.

It looks like as long as there are such entries though they were entered by using the step by step way, the error will occur.

I still need help here.

Thanks!

[AmyC]

Are you getting a review error letting you know you have negative income that you can continue past or are you getting an error that stops you from filing?

A review error makes sense, ignore it since you know you have negative income. Stopping you from filing is another issue. We tell lots of people to make a negative entry there for many reasons and they are able to efile. I wonder if there is something more going on. Will you double check where you are seeing the error and if you can go past it?

@tosei 

[tosei]

@AmyC  Thank you very much!

I have a positive income since I am still working in the U.S.

I followed your instructions—sort of—twice. The first time, I entered a positive amount (with a description like “Social Security from China”) to report the income I received from China. The second time, I entered the same amount as a negative value, with a description like “Nontaxable Social Security – U.S.-China treaty,” to offset the income.

After this, I get an error during the “Smart Check.” I can ignore it at that point and move forward, but right before e-filing, I get the same error message again—and this time it stops me from proceeding.

So my issue is that I can’t file the return electronically.

I’m considering filing my tax return electronically without reporting the Social Security income, and then submitting an amended return by mail to include it.

Do you think that approach would work?