I am trying to understand how U.S. tax laws work with regards to foreign social security benefits. I am not a tax professional, so please excuse any possible omission of details. Please let me know what other information is needed, if any.
These are the facts: I am a U.S. citizen residing in Texas for the
past 30+ years and working in the USA for a U.S. company. I have dual
US/Swiss citizenship. For the past 30+ years I have contributed into
the U.S. Social Security System; at the same time I have (voluntarily!)
also contributed into the Swiss Social Security System.
In essence, I have made _full_ social security contributions to the
retirement systems of two different countries based on my U.S. earned
income for the past 30+ years.
I was taking a look at art. 19.4 of the tax convention between the USA
and Switzerland for the avoidance of double taxation
which basically says that Swiss Social Security
benefits are taxed by the U.S. government (I reside in the USA) and
also by Switzerland (max. tax rate of 15%).
So, once I will start receiving Social Security benefits from both
countries, will I combine both payments, report the total on line 20a
of my 1040, complete the Social Security Benefits Worksheet for line
20b, and then take a foreign tax credit?
Is that how it will work?
- posted 5 years ago