German Income

[Earl]

Have client who is 70+ years old who is of german descent. Has been in this country for many years.
She has started receiving an amount (2k) from the German government. The only thing she was able
to tell me was that this income is because she had children while she lived in Germany years ago. The
children are now adults. She was unable to give me a name for the program under which she receives
this income.

Does anyone have any idea of what this would be and whether it is taxable to United States.

[DonB]

Taxable, report on line 21 of the 1040. Worldwide income is taxable.

[Gretel]

You need to find out if these benefits are in any way SS benefits. If they are, they follow the same rules like US SS benefits. Unlike here, the German Government does not mail a tax form but there should be some type of mail. Your client did not just get a check in the mail. You can send me a private message if you need help translating.

[Earl]

German Income

She said that the money is deposited in her bank account each month. She said
it is money she receives because she gave birth to children in Germany. From what
I have read the German government came up with a program to encourage people to
have children since the birthrate in Germany is now so low.

She did not know the name of the program giving rise to the payments but she is going to
talk with relatives in Germany and find out if it is taxable in Germany and what
the name of the program is.

Hopefully when I have this information I will be better able to make some kind
of determination.

[DonB]

Check out the tax treaty with Germany-- http://www.irs.gov/pub/irs-trty/germany.pdf