tax rate on social security benefits


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    • #193669

      I realize this website covers issues pertaining UK citizens but may be tax rates for retirement benefits in Spain are the same regardless where they come from. I am looking for information pertaining tax rates for US based Social Security benefits that foreign residents are subject to.

      Simple example: a couples residing in US and receiving up to $32,000 annual Social Security benefits do not owe federal taxes. For purpose of this example I assume they live in state that doesn’t tax social benefits. Now, if the same couple live in Spain above 183 days/year and therefore have a residency status and receive the same up to $32,000 of US social security benefits in Spain do they have to pay taxes and if yes what is the tax rate?




    • #193777

      As I read, the answer is yes, SS income is considered pension income in Spain and is taxable.

      “Occupational and State pensions are only taxable in Spain if you are resident there, and are taxed as ‘general’ income in Spain, and added to income such as rental income and other pensions taxable in the same way, as part of your worldwide income.  A deduction of between €2,652 and €4,080 is available against such income (the higher the income, the lower the deduction, although it cannot be reduced below €2,652) in calculating the taxable income.  This income is then taxed at the progressive scale rates from 24% to 43%.”

      • #193781

        Here is what I found on
        Filing Taxes as a US Expat in Spain

        Scenario #4: Expat living on retirement income from the USA
        You are living in Spain and only have income from a retirement account and US Social Security. You don’t pay taxes to Spain on the income.
        You will figure and pay taxes to the USA on your income as you would if you were living in the USA. Your income does not qualify for the Foreign Earned Income Exclusion, as it’s considered passive income (not earned). You don’t pay taxes to Spain on your income, so there are no Foreign Tax Credits to use.

        “This post was written by David McKeegan, co-founder of Greenback Expat Tax Services. Greenback specializes in the preparation of US expat taxes for Americans living abroad.(”.

        It seems that based on treaty between US and Spain similar to what US signed with Poland and other countries.

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