Pension from Austria....taxable?

[nwtaxlady]

I have a new client that says she gets a pension from Austria. She is an elderly lady and has lived here in the USA since 1962.
She explained it to me that it is like the Social Security we get here in the US. When she dies it stops. It's a set amount every month etc.
Is it taxable? Do we do anything with it? Please help! Thank you!!

[mastertaxguy]

Tax treaties-us austria

1. Have you looked at any relevant tax treaty between the United States and Austria?
2. If not, you should.
3. irs.gov; search for austria tax treaty or just tax treaty.

[Kram BergGold]

Depends

German SS is taxable in US. I think French SS is not. You have to read the tax treaties.

[mastertaxguy]

Austria us tax treaty

I have a new client that says she gets a pension from Austria. She is an elderly lady and has lived here in the USA since 1962.
She explained it to me that it is like the Social Security we get here in the US. When she dies it stops. It's a set amount every month etc.
Is it taxable? Do we do anything with it? Please help! Thank you!!

Article 18 of the US-Austria treaty provides:

1. Subject to the provisions of Article 19 (Government Service),
a) pensions and other similar remuneration beneficially derived by a resident of a Contracting
State in consideration of past employment shall be taxable only in that State, and
b) social security payments and other public pensions paid by a Contracting State to an individual
who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the
first-mentioned Contracting State.

This is similar to other treaty language which I have applied to mean that the US resident (citizen, green card holder or substantial presence) who receives the payments you describe is not subject to US taxation. Generally, when I report these payments I show them either as a statement attached to the return and zeroed out, or show them on line 21 (not as social security payments) and then adjust them out (usually line 36) citing the treaty reference AND attach an election statement. I do the same thing each year. Others may have other reporting methods that work for them.

[nwtaxlady]

thanks you!

Thank You very much for the information!