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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2430
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I have worked in Germany for 30 years and I am receiving

Customer Question

I have worked in Germany for 30 years and I am receiving German Social Security and a pension from a German employer. I was German Citizen at the time I was working. I came to the USA 16 years ago and have dual citizenship now. Do I have to pay taxes on those pensions. They would be tax free if I still would live in Germany. I have read that a German citizen does not need to pay taxes on German social security in the USA. Thank you.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: I am retired now and receive Social Security from the USA and pull income from my 401k. Thank you.
Submitted: 11 months ago.
Category: Tax
Expert:  Anne replied 11 months ago.

Hi

I'm Anne & I've been preparing taxes for 28 years. I'm reviewing your question now, and will post back with your reply momentarily.

Expert:  Anne replied 11 months ago.

HI

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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