How to properly report foreign social security income on US tax return - resident alien questions

This is a great question that comes up frequently for resident aliens. Foreign social security benefits should generally be reported on Form 1040, line 6b as "Social Security Benefits." However, you'll also need to complete Form 1040 Schedule 1 to report it as "Other Income." Unlike US Social Security where only a portion might be taxable, foreign social security without treaty protection is typically 100% taxable. You should also be aware of potential foreign bank account reporting requirements if the payments are deposited into a foreign account (FBAR filing on FinCEN Form 114 might be required if you have over $10,000 in foreign accounts at any point during the year). TurboTax doesn't have a specific section labeled "foreign social security," but you can report it by going to the "Other Income" section and selecting "Other Common Income" and then "Other Income not reported elsewhere.

After dealing with this exact issue last year and getting inconsistent advice, I finally discovered taxr.ai (https://taxr.ai) which was incredibly helpful for my situation with Portuguese social security payments. I uploaded my foreign social security documentation and got a clear analysis of exactly how to report it properly. The tool specifically identified that my foreign social security needed to be reported fully (100% taxable), and gave me the exact forms and line numbers to use. It even provided citations to the specific IRS publications that applied to my situation. Was much clearer than what my previous accountant told me.

I wanted to follow up about my experience with taxr.ai after being skeptical in my earlier comment. I decided to try it with my German social security documents, and I'm genuinely impressed with the results. The analysis broke down exactly how to handle the income under the US-Germany tax treaty (which I didn't even realize applied to my situation). The tool identified that 15% of my payments were actually exempt from US taxation under the treaty provisions and provided the exact treaty article number. This saved me about $1,200 in taxes that my previous accountant had overlooked. It also walked me through how to properly document this on my tax return to avoid raising audit flags. Definitely worth checking out if you're dealing with foreign income sources.

If you're trying to get confirmation from the IRS about how to properly report this income, good luck getting through to them on the phone. I spent 3 weeks trying to get answers about my Canadian social security payments last year. Finally used Claimyr (https://claimyr.com) to get through to the IRS and got clarification in a single day. They have a demo video of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that for my situation (with no applicable tax treaty), I needed to report 100% of the foreign social security as taxable income on Schedule 1 as "Other Income" with a description. She also explained that I needed to convert the amount using the yearly average exchange rate, not the rate on the day I received each payment, which would have been a huge headache to calculate.

I need to eat my words from my previous comment. After my frustration with trying to reach the IRS about my French social security reporting questions, I reluctantly tried Claimyr last week. Within 3 hours, I got a call connecting me to an actual IRS representative who specialized in international tax issues. The agent walked me through exactly how to report my French benefits and confirmed that I needed to use the Foreign Tax Credit (Form 1116) for the French taxes I'd already paid, rather than trying to claim an exemption that doesn't exist. This saved me from making a mistake that might have triggered an audit. I've spent literally days trying to get this information before, so getting it resolved in one afternoon was pretty remarkable.

Don't overlook currency conversion! This tripped me up last year reporting my Italian social security income. The IRS requires you to convert using the annual average exchange rate, not the rate at the time you received each payment. You can find these rates on the IRS website or Treasury Department's website. Also make sure you're reporting any foreign taxes you paid on this income. Even without a specific treaty benefit, you might be eligible for the Foreign Tax Credit on Form 1116 which can offset some of your US tax liability.

I ran into this exact problem with my German social security payments. My accountant initially reported it wrong, and I ended up getting a CP2000 notice from the IRS about unreported income because they get information from foreign governments. Make sure you properly document everything, especially the conversion rate used and how you determined the income was taxable. Having good records saved me when I had to explain everything to the IRS during my notice response.

One more thing to consider - if you're transferring this money from your foreign bank account to the US, be aware of FBAR filing requirements (FinCEN Form 114) if your foreign accounts exceed $10,000 at any point during the year. The penalties for not filing FBAR can be severe, even if you properly reported the income. Also, depending on your country, there might be foreign withholding tax on these payments. You'll want to look into Form 1116 (Foreign Tax Credit) to avoid double taxation.

As someone who went through this exact situation with UK social security benefits, I want to emphasize how important it is to get this right from the start. I made the mistake of treating my UK State Pension as partially taxable (like US Social Security) for two years before realizing that without a treaty exemption, it's 100% taxable. The key points that helped me: 1. Report it on Schedule 1 as "Other Income" with a clear description 2. Use the annual average exchange rate from the IRS website for currency conversion 3. Keep detailed records of all payments and conversion calculations 4. If your home country withheld any taxes, explore Form 1116 for Foreign Tax Credit Don't wait to fix this - I had to file amended returns for the previous years which was a headache. The IRS is getting better at tracking foreign income through international information sharing agreements, so they'll likely catch unreported or incorrectly reported amounts eventually.

This is such a helpful thread! I'm dealing with a similar situation with Japanese social security payments and was completely lost until I found this discussion. The information about using Schedule 1 "Other Income" instead of trying to find a specific foreign social security section in tax software is exactly what I needed. One thing I want to add based on my research - if anyone is dealing with Japanese social security specifically, Japan does have a totalization agreement with the US, but it only prevents double social security taxation for coverage purposes, not income tax purposes. So the payments are still fully taxable in the US even though you might not owe Japanese social security taxes on US income. For those mentioning currency conversion, I found the IRS Publication 514 "Foreign Tax Credit for Individuals" really helpful in understanding the exchange rate requirements. It clearly states you should use the yearly average exchange rate for the tax year in which you received the income, not the current year you're filing. Has anyone dealt with situations where the foreign social security system made retroactive adjustments to previous years' payments? I received a lump sum adjustment last year for underpayments from 2021-2022, and I'm not sure if I should report it all as 2023 income or try to amend previous years' returns.

This thread has been incredibly helpful! I'm dealing with Australian superannuation payments (which Australia treats as a pension but the US might view differently) and I was completely confused about the reporting requirements. Reading through everyone's experiences, it sounds like the key is getting clear guidance on whether my payments are classified as foreign social security or foreign pension income, since the tax treatment can be different. Australia and the US do have a tax treaty, but I'm not sure if it applies to my specific situation. Based on what others have shared about taxr.ai and Claimyr, I'm thinking about trying one of these services to get clarity before I file. The currency conversion aspect alone is giving me a headache - my payments come in AUD monthly but with fluctuating exchange rates throughout the year. Has anyone here dealt specifically with Australian superannuation reporting? I'm particularly concerned because some of my super payments might include both taxable and non-taxable components under Australian law, but I have no idea how the IRS views this distinction.

This thread has been incredibly informative! I'm new to this community and dealing with a similar situation with social security payments from Sweden. Reading through all these experiences has been eye-opening - I had no idea about the FBAR requirements or the importance of using the correct annual average exchange rates. One thing I wanted to add that might help others: I discovered that Sweden and the US do have a tax treaty (unlike some countries mentioned here), and Article 18 specifically addresses social security benefits. It turns out that Swedish social security payments to US residents are generally taxable only in the US, which means I don't have to worry about double taxation issues that some others have mentioned with countries like France or Germany. However, I'm still confused about one aspect - the treaty says the benefits are taxable "only in the State of residence," but I'm not sure if this means I report it differently on my US return compared to countries without treaties. Does having a treaty exemption change which forms I use, or do I still follow the same Schedule 1 "Other Income" approach that everyone's been discussing? Also, for anyone else dealing with Swedish social security, be aware that Sweden withholds tax at source on these payments, so you'll definitely want to look into Form 1116 for the Foreign Tax Credit to avoid paying tax twice on the same income.

As someone who's been lurking in this community for a while, I finally had to jump in because this thread perfectly captures the confusion I've been dealing with regarding my Canadian pension payments! I'm a US citizen who worked in Canada for several years and now receive CPP (Canada Pension Plan) payments while living back in the US. Reading through all these experiences has been incredibly helpful - especially the clarification about using Schedule 1 "Other Income" rather than trying to find some mysterious "foreign social security" section in tax software. I've been using FreeTaxUSA and kept getting frustrated that there wasn't a clear option for this situation. One thing I wanted to add for others in similar situations: the US-Canada tax treaty does provide some relief for social security/pension payments, but it's not a complete exemption. Article XVIII allows for partial taxation, meaning typically only 85% of the Canadian social security benefits are taxable in the US (similar to how US Social Security works), rather than the 100% taxation that applies to countries without treaties. However, I learned this the hard way after initially reporting 100% as taxable income and then having to file an amended return. The treaty benefits don't automatically apply - you have to know to claim them and understand how they work. Has anyone else dealt with Canadian CPP/OAS payments and the treaty provisions? I'm still not entirely confident I'm handling the currency conversion correctly, especially since the CAD/USD exchange rate has been so volatile over the past few years.