Submitted By: Manish
Answered: January 29, 2016 12:03 pm

Is my foreign pension taxable?

U.S. citizens and residents pay tax on their worldwide income. However, if you live abroad, the articles of most tax treaties allow the country of residence to tax pensions under its laws. If you live in the US and receive a pension paid by a payor from a foreign country, you can claim the applicable treaty withholding exemption. If the foreign government, and/or the foreign withholding agent, refuses to honor the treaty claim, make the treaty claim on your income tax return, or other prescribed form, filed with the foreign country. If you pay taxes abroad, you may be able to claim a foreign tax credit on your U.S. tax return for any foreign income tax withheld from your foreign pension.

Tax Glossary

Ordinary income

Income other than capital gains.

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