Inheritance or income

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My husband died last year. If I receive a payment from social security in a foreign country for past payments over a number of years that he was underpaid and I am his beneficiary do I have to pay tax on that money.

Ask the Experts - Extension - Sept 2023

MartyG

Level 4

Hi Vivmarsh,

First of all, I'm sorry for your loss.

Generally yes, you would have to report the payment as taxable income on your US tax return (assuming you are a US resident/citizen). As a US citizen/resident, you are taxed on your worldwide income when you receive it. So whether you receive US social security while residing in a foreign country, or foreign Social Security while residing in the US, you would still be taxed on it.

This would not be considered an inheritance as it is, as you say, social security income being paid out later. You are taxed on income in the year in which you receive it. Sorry for the bad news. 😞

I hope this helps,

Marty

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