Do I need to report French social security in Turbotax and how do I keep it from adding to my taxable base, since I know that it is taxed in France before I receive it?

I am a US citizen and receiving US Social security,but also receive a small monthly amount from France.  I know we have a treaty with France, and the amount is taxed before I receive it.  Where would I report this on my return?  I don't want it to add to my taxable social security income, as it is already taxed in France before I get it.

In prior years I have lumped this with my US social security on my return, but I dont think that is the proper way to handle this.

Answer

Please read TurboTax TaxPro Kitty's response to a similar question (her instructions will work for your French social security as well): 

Most income tax treaties have special rules for social security payments.  In many cases, foreign social security payments are taxable by the country making the payments.  Unless specified otherwise in an income tax treaty, foreign social security pensions are generally taxed as if they were foreign pensions or foreign annuities. Unless a tax treaty allows it, they are not eligible for exclusion from taxable income the way a U.S. social security pension might be.  If your Spanish Social Security pension is excludable, you can enter it like this:

You will enter your Spanish Social Security as "Other Income."  To enter it on your return, follow the instructions below:

  • Choose the Federal return and the Wages & Income tab.
  • Scroll down to Less Common Income (you may have to choose Add more income and See more income to view this topic) and Show more.
  • Choose Miscellaneous Income, 1099-A, 1099-C.
  • Choose Other Reportable Income and say Yes.
  • The screen says "Do not enter income reported on Form 1099-MISC".  This is where you will enter the description "Spanish Social Security" and the amount you received.

To back out the income,

  • In your Federal return, choose the tab for Wages & Income
  • Scroll down to Less Common Income and Show more
  • Start/Revisit Miscellaneous Income and choose Other reportable income 
  • Say Yes to continue to the screen "Other Taxable Income". Enter your description  and the amount as a negative number. 

Corresponding entries will appear on Form 1040, Schedule 1, Line 21 of your return.  You may not see it, since these two entries will amount to zero, but it's there.

[Edited 3/23/19 | 9:08am]

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