Where do I specify foreign taxes withheld on foreign Social Security income? I don't see a way to do this on substitute form 1099-R.

[DNN]

Hmmm... So is there any support at Turbotax that would help decipher the treaties as it is certainly absolutely not clear whether you have or not to declare the "Foreign" Social Security income... The legalese descriptions are not understandable to any senior average person!!!

Thanks, any help is welcome! 

[SusanY1]

Foreign social security income is generally taxable on your US return, unless you are covered by a "Totalization Agreement".  You can find a list of the countries where the US has these agreements HERE.

I agree, the descriptions and legalese aren't always easily understandable - and that's not just applicable to average seniors!  This is particularly true of these Totalization Agreements - so if you're not certain if you're covered, you may wish to report the income as taxable and then include the tax paid for a foreign tax credit, or consult with an advisor familiar with foreign income tax matters.  (Odds are that you are paying higher tax on the income in the other country than would be due on it in the US.) 

Foreign withholding or taxes paid aren't entered on the substitute 1099, as that implies withholding that has been sent on your behalf to the IRS.  Instead, you will leave the withholding number blank on the substitute 1099-R section and enter the tax you paid to the other country in the section for foreign tax credits in TurboTax. 

Follow the instructions found HERE to enter the taxes paid for the foreign tax credit. 

Please let us know if you have additional questions.



 

[DNN]

Yes the Netherlands are in the list for "tax treaty"... and I had hoped it was clearly stating whether the Dutch Social Security was part of some "exclusion" as to not go through the headaches of figuring out HOW to do all those crazy steps that I have a hard time to follow... But I guess that would make my life too easy and this seems to definitely NOT be the aims of any administrations...

Unfortunately I don't think your statement is true about having paid enough taxes because it seems that the Dutch don't tax Social Security payments as much as what the US is taxing but I might be wrong...

Thanks for the answers, I will try for the nth time to tackle these entries and probably come back with even more questions ... 

Stubborn old persistent tax payer.

[DaveF1006]

It depends.  According to Article 19 Line 4 of the US/Netherlands Tax Treaty, "Subject to the provisions of paragraph 2 of Article 20 (Government Service), pensions and other payments made under the provisions of a public social security system and other public pensions paid by one of the States to a resident of the other State or a citizen of the United States shall be taxable only in the first-mentioned State".

This means that social security or other public pensions are only taxable in the Netherlands if you are a citizen of the US, thus should not be reported on a US return.

US/Netherlands Tax Treaty

@DNN 

[DNN]

Well I think this works only if your SS Payer has an EIN if you wish to eFile?

[DNN]

Hello,

I already have entries from my 1099 DIV and everything's get "messed up" when I try to add that FTC for my Dutch Social Security... is there a set of Instructions to follow to just add the one form and have the prior entries that showed up "automatically" left undisturbed??? 

Thanks!

[DNN]

Thanks to make it clear!!! I cannot make you know how much help this is!!!

[DaveF1006]

To clarify, why are you even adding the Dutch Social Security when it isn't reportable in the US and you have already paid tax on it in the Netherlands? Since you are not adding it as income in the US, you can't claim a foreign tax credit on it.  Leave it out since it is not reportable in the US according to the US/Netherlands tax treaty.  

Now since this is eliminated, your prior entries should be left undisturbed.

[DNN]

I got the clarification about not having to enter the Dutch Social Security Income after the trials... Thank you for the help, I'll try to finish again tomorrow (removing it... and checking...).

Thanks again!

[DNN]

And I was concerned about this statement from the IRS as I did not understand what is the "Saving Clause":

[DawnC]

The Netherlands/US tax treaty has an exception for pension and public social security income specifically, so the savings clause does not apply.    There is no need to report the Dutch SS on your Form 1040.  @DNN 

[gvanmoor]

Indeed, the existing US - NL tax treaty means you don't have to include Dutch Social Security/AOW on your return at all.  I haven't done so for several years now, and have successfully filed amended returns for some previous years when I had included Dutch Social security.  Other info presented in this thread was still useful for me as I apply it to declare my Dutch ABP pension to which the treaty does not apply as far as I know