# Taxes on US income (SS) - Spain



## lorort (Dec 24, 2015)

I will retire from teaching Aug 2016 and will collect Social Security benefits as soon as I turn 62. Does anyone on this forum living in Spain know how this income (teaching pension and social security pension) will be taxed? Any information would be appreciated.


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## Bevdeforges (Nov 16, 2007)

This probably belongs in the Expat Tax section, but before I move it, I'll give you a quick overview.

I think the US and Spain have a tax treaty - so generally speaking, when it comes to US Social Security, you'll pay US income tax on your benefits. (You will have to continue to file US income tax returns wherever you live in the world if you meet the filing threshold for your filing status.)

Get hold of a copy of IRS Publication 915 for all the details. And a copy of Pub. 54 for how to file your US tax returns from "overseas" (i.e. Spain).
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Here's a link to the tax treaty for reference. As I read it, U.S. Social Security retirement benefits are only U.S. taxable per the treaty. For other pension income it varies -- it depends on the nature of the income.

Just in case you are not aware, if you are in good health it would be prudent to delay collection of your U.S. Social Security retirement benefits as long as you financially can (but no later than age 70). The increase in monthly benefits is very substantial if you can delay. If you're married you can also take a look at whether one of you should collect spousal benefits, although Congress cut down on some of what's possible in that respect.

Don't forget to enroll in U.S. Medicare Part A just before your 65th birthday. If you're a full-time resident of Spain then you may end up skipping the other parts, but Part A is free for you (I assume), and that can't hurt.


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## Bevdeforges (Nov 16, 2007)

We'll have to flag down someone familiar with the Spanish tax system, but generally speaking, if you plan on living in Spain, you'll be subject to Spanish taxation (most likely for the teaching pension). Normally, you report your worldwide income, but there are usually some methods to indicate that some of your income (i.e. your US Social Security) is subject to international treaty and thus receives some form of exoneration or credit. But basically, you'll be filing two sets of income tax forms if you're living overseas - US and local.

When to claim your US Social Security is up to you. The US Medicare is only useful when you're back in the US visiting. As BBC says, Part A is free, so why not - but as long as we're on the subject, you will most likely need private health insurance to be able to get a visa for Spain, or to live there long term.
Cheers,
Bev


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## lorort (Dec 24, 2015)

Thanks for the responses. I also believe that Social Security pension will not be taxed in Spain but in the US. It is my teacher's pension that will be doubled taxed. I do know about waiting to collect my social security but will do it early. I do not plan on making the move for two more years just want to get my ducks in a row. I am aware about having to pay for private health care but my question is will I be able to buy into healthcare via the Convenio Especial after living there a year? Or is that only for EU residents.


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## BBCWatcher (Dec 28, 2012)

lorort said:


> It is my teacher's pension that will be doubled taxed.


It's very likely that Spain would allow a credit for foreign (U.S.) tax on that income even if the income is taxable in Spain.


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## Bevdeforges (Nov 16, 2007)

If there is a tax treaty, you should not be double taxed on the private pension. However, you'll have to check with someone in the Spanish forum perhaps to understand exactly how you need to declare the pension to get the appropriate treatment. I suspect it is as BBC says - you'll pay tax in Spain and then use the tax paid to claim a tax credit against your US taxes.

On the health care insurance, you should post a query in the Spanish forum. There may or may not be a way to buy into the Spanish system after a period of residence. It's not always possible, particularly if your visa requires you to carry private health coverage. But better to ask the question.
Cheers,
Bev


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## xabiaxica (Jun 23, 2009)

Bevdeforges said:


> If there is a tax treaty, you should not be double taxed on the private pension. However, you'll have to check with someone in the Spanish forum perhaps to understand exactly how you need to declare the pension to get the appropriate treatment. I suspect it is as BBC says - you'll pay tax in Spain and then use the tax paid to claim a tax credit against your US taxes.
> 
> On the health care insurance, you should post a query in the Spanish forum. There may or may not be a way to buy into the Spanish system after a period of residence. It's not always possible, particularly if your visa requires you to carry private health coverage. But better to ask the question.
> Cheers,
> Bev


What usually happens in Spain, with a tax treaty, is when you submit your annual tax declaration there is provision to show that you have paid tax already on the income. In those circumstances you don't pay the same tax again, though if the tax liablity is higher in Spain, you pay the difference.

It does go the other way as well, & I've known people to receive tax rebates in the past, when the tax liablity was lower in Spain!


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## dancebert (Jun 4, 2015)

BBCWatcher said:


> Here's a link to the tax treaty for reference.


That IRS doc is dated 1991. In 2013 Spain and the US amended the treaty: https://www.treasury.gov/resource-ce...-1-14-2013.pdf


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