Hi! I've read the IRS guidance and the other TurboTax community discussions on this topic, but have a follow-up. We receive social security payments from a foreign country paid into a foreign bank account (all reported as required). The social security payments are not for retirement; the foreign country pays a monthly amount (and an initial lump sum) for each of our children under the age of 6. I have been reporting this total amount annually under "other income" (as suggested by tax experts in this community). After re-reading the IRS guidance, I wonder if I have been overpaying. If we are paying INTO the foreign country's social security each month (e.g., $20 a month), and receiving a payment from them each month as well for the kids (e.g., $60 a month), do I have to report and pay tax on the $60 payment we receive, or only $40 (the difference between what we receive and what we put in)? Any guidance would be appreciated. Thank you.
For reference, the IRS states: "Just as with domestic pensions or annuities, the taxable amount generally is the Gross Distribution minus the Cost (investment in the contract)."
https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions
