itonewbie
Level 15

The key question is which country the taxpayer was a resident of.  The US-UK Income Tax Treaty cedes to sole right of taxation for social security to the country of residence and this is not subject to the saving clause.

If your client was a US resident based on article 4, social security benefits from the UK will only be taxable to the US.  Since the US-UK treaty article does not specifically provide for the tax treatment of social security benefits (like those in the Canadian and German treaties), these benefits will be subject to US tax as foreign pension or annuities - exclusion for US social security benefits will not be available.  You may, therefore, report these either on Line 16 or 21.

If you do report these on Line 16, make sure you complete the section for foreign pension, under which you could select United Kingdom as the country, check the box that no 1099 was issued, etc.  So long as these fields are populated correctly, it should allow you to get past the critical diagnostics without having to enter an EIN.

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Still an AllStar

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