How to exempt foreign-sourced social security benefits with a totalization treaty

Forum|Forum|4 years ago
August 7, 2021
3 replies
22 views

This is a mechanical question rather than a tax issue question.

The taxpayer received French social security benefits, and France and the United States have a totalization agreement which says that French social security benefits are exempt from United States income tax (edit: I think it's actually the USA-France income tax treaty and not the totalization agreement that does this, if anyone cares to split hairs).

Furthermore, the savings clause of the USA-France tax treaty specifically exempts social security pensions.

This is also not required to be disclosed via form 8833 as a treaty-based return situation.

My intent therefore is to report the French social security benefits on 6a, but I also need to exempt the French social security benefits from being taxed. How do I do so in ProSeries and via which IRS forms?

Thank you.

ProSeries Professional

This topic has been closed for replies.

Best answer by BobKamman

If you really want to wreak havoc with IRS computers, show it on Line 6a. If you want to follow the Treasury regulations, rely on Section 301.6114-1(c)(1)(iv), which in legal terms embodies the doctrine of “Fuhgeddaboudit.”

Just-Lisa-Now-

Intuit Community Champion

if theyre not taxable, do you need to report them at all?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

L

Learner1Author

Level 3

I'm hesitant to simply not report the French social security benefits, and also hesitant to do any overrides in ProSeries (I know you did not suggest this, but I was previously brainstorming entering the amount in line 6a and then overriding the calculations thereafter). Is there another way?

BobKamman

Level 15

He who hesitates is lost. On the other hand, remember that treaty benefits aren't always recognized by state income tax laws. I hope you're in Texas or Florida. Well, no, that sounds like a death sentence. I hope you're not in California, where I think there was a question a while back about taxation of some country's Social Security benefits.

If it makes you feel better, attach a pdf explanation to the return, since no one at IRS reads attachments but it might save some research by the next practitioner who gets this client.

BobKammanAnswer

Level 15

If you really want to wreak havoc with IRS computers, show it on Line 6a. If you want to follow the Treasury regulations, rely on Section 301.6114-1(c)(1)(iv), which in legal terms embodies the doctrine of “Fuhgeddaboudit.”

L

Learner1Author

Level 3

Okay thanks I'll review that code shortly.

T

Terry53029

Intuit Community Champion

I would report on other income and back it out as an adjustment to income, and not on 6A as that is for US SS and some countries that some of the SS may be taxable same as US SS.

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