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No special double taxation relief rule is required Under Article 19 where Swiss social security benefits are paid to U.S. residents because Switzerland does not tax the benefits when it is the source country.U.S. residence-basis taxation of Swiss social security benefits is not limited by the Convention between US and Switzerland. You will treat the payments as annuity payments. The percentage that would be taxable would be based on the amounts contributed while under US taxation.
If I understand you correctly, if the entire amount contributed to the AHV was made while we were subject to US residency and tax laws the entire payment received in any year will be taxable at out regular tax rate?
The payments are treaty as annuity for tax purposes. Any amounts contributed that were made with money that was taxed by the US already can be used as the basis in the annuity. If you contributed after-tax dollars to your pension or annuity, your pension payments are partially taxable. You will not pay tax on the part of the payment that represents a return of the after-tax amount you paid. This amount is your cost in the plan or investment, and includes the amounts your employer contributed that were taxable to you when contributed.Taxed under either the General Rule or the Simplified Method. You need to use the simplified method because the payments started after 1996.
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