In addition to Social Security benefits, I receive monthly benefits from the Canada Pension Plan. I am a resident alien. Are my Canada Pension Plan benefits taxable? How do I report them?
Benefits paid under the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), and Old Age Security (OAS) program to a U.S. resident are taxable only in the United States. These Canadian benefits are treated as U.S. social security benefits for U.S. tax purposes. If your total income is above certain limits, a maximum of 85% of your benefits will be subject to U.S. tax. Any benefit under the social security legislation of Canada that would not be subject to Canadian tax if paid to a resident of Canada is not subject to U.S. tax.
Canadian benefits that are treated as U.S. social security benefits are reported on line 20a and 20b of Form 1040 or line 13a and 13b of Form 1040A.
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For an American citizen residing in Canada using Form 1040A, should taxable amount of social security benefits as shown on line 13b be $0.00 due to the Canada-U.S. tax treaty?
Under the 1997 protocol, the Canadian and US governments agreed to return to a residence-based system under which social security benefits are taxable exclusively in the country where the recipient resides. As a result, the entry for line 13b would be $0.00.
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In addition to U.S. Social Security, I also receive British Social Security. How should I report the British Social Security income?
According to the U.S.-United Kingdom treaty, social security income gets sourced to the country of residence. If you are a resident of the U.S. for tax purposes, the income would be reported and taxed in the U.S. You would not treat the income as U.S. social security benefits. The entire amount would be taxable as pension income on your U.S. tax return.
British social security received by a nonresident alien would not be taxable in the U.S. Also, a private British pension payment made to a nonresident alien for services performed outside the U.S. is not taxable in the U.S.
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Are Social Security benefits received from Austria and Germany treated like U.S. Social Security benefits? If not, how is it reported and under what kind of income?
Austrian social security benefits paid to a U.S. resident are taxable only by Austria and not also by the United States. German social security benefits paid to a U.S. resident are taxable only by the United States. These German benefits are treated like U.S. social security benefits. Refer to foreign employment contributions in Publication 575, Pension and Annuity Income.
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