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HiI'm Anne & I've been preparing taxes for 28 years. I'm reviewing your question now, and will post back with your reply momentarily.
When it comes to the Germany sourced Social Security benefits, Article 19/#2, of the IRS/Germany treaty (https://www.irs.gov/pub/irs-trty/germany.pdf) provides that the distributions are taxed only in your country of residence. The treaty also results in your German social security payments being taxed the same way as U.S. social security income – only taxable if your overall income is over a certain amount.
As a general rule, the pension/annuity articles of most tax treaties allow the country of residence (as determined by the residency article) to tax the pension or annuity under its domestic laws. This is true unless a treaty provision specifically amends that treatment. Unfortunately, Article 18 of the Germany/IRS treaty does NOT exempt your German pension from US tax.
I know this was not the answer you were hoping for. Please know if there was a legal way to exempt this income from US taxation, it would have been my pleasure to tell you.
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