However, most appear not to be expecting it and, as it can only mean a reduction in Social Security (SS) benefits, often comes as an unpleasant and unwelcome surprise. I am taxes at 85% on Social security the UK pension will also be effected by 85% rate, but if I go to line 21 on form 1040 as mentioned and claim 100% of my pension as (-) now I have calmed total of 115% of my UK pension. 16/16 Nachal Nitzanim I am US citizen and Receive UK pension and trying to find how the UK and USA treaty helps to reduce taxes on Pension I Receive form UK. Whilst an individual can be entitled to receive both a US Social Security benefit and a UK State Pension benefit, this does not mean that the projected benefit entitlement outlined on their US Social Security Statement will be the amount they receive. will guide you in entering this information. Despite meeting the substantial presence test, you’re allowed to still claim classification as a nonresident alien when you were present in the U.S. for less than 183 days during the year, you maintain a tax home in another country, and you have a closer connection to that country than to the U.S. If, on … Per the U.S. tax treaties with the above mentioned countries, US social security benefits are only taxable in the expat’s country of residence, not in the US. Our apologies for not being able to assist you. This was exactly the same result I received when asking an IRS agent. Residency Tests You are a resident alien for the tax year if at any time during the year you meet the “green card test” by having lawful permanent residency status under U.S. immigration laws. You have to report worldwide income regardless of whether the income is paid into your US bank or UK bank. Fortunately, there is there is a social security agreement (SSA) between the UK and the US which deals with the calculation and payment of state pensions for people who have worked in both countries. (b) However, such pension shall be taxable only in the other Contracting State if the recipient is a national of and a resident of that State. Second, wouldn’t the savings clause override paragraph 2 of Article 17 of the Treaty so that the UK could tax UK residents on lump sum payments (whatever they are) out of private US pensions? My U.K. pension was not a voluntary contribution but a mandatory deduction withheld from my paycheck just like for my U.S. Social Security. U.K. Social Security is treated the same as U.S. Social Security income for these individuals. Dear Rusty: Today I had my interview for Social Security and was told that because I receive a government retirement pension from the United Kingdom, my Social Security check will be reduced by up to 55 percent. Hi Robert – The Social Security Administration applies something called the Windfall Elimination Provision (WEP) to an individual’s US Social Security benefits if they worked in a job where Social Security taxes were not required to be paid and they have also earned a pension from that job.