Discussion:German pensions
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Discussion Forum Index --> Basic Tax Questions --> German pensions
Discussion Forum Index --> Tax Questions --> German pensions
Mcwargula60 (talk|edits) said: | 18 March 2008 |
| client and spouse, both us citizens worked in germany as laborers prior to becoming us citizens. they have been receiving a pension from the german government of about $ 10,000. annually. They have never reported it to the irs or to new york state. does anyone know if this pension income is exempt from us and new york taxes.thank you
Mcwargula60@verizon.net | |
Michaelstar (talk|edits) said: | 18 March 2008 |
| It is not exempt from US income taxes. It is treated the same as US SS income and taxed accordingly pursuant to Article 19 of the income tax treaty between the US and Germany.
I do not know about NY but here in CA it is fully taxable and not subject to the same 85% limit for Fed. Note - US SS income is not taxable in CA so this is a major difference. | |
| 19 March 2008 | |
| The client may have a tax basis in the pension if he contributed after-tax Deutsche Marks to the pension plan. | |
| 19 March 2008 | |
| Wouldn't it be nice if it were deemed that I had a tax basis in my Social Security pension - I contributed a lot of after tax money to that plan. | |
| 19 March 2008 | |
| Prior to 1995, all taxpayers had a basis in their Social Security benefits, but Congress decided that it would be ok to take half of that basis away from us. Later on, they decided that it would be ok to take 85% of that basis away.
Generally, a taxpayer is not allowed to claim basis in a foreign social security payment that was financed through involuntary contributions. | |
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