# Disability pensions, private & US government, USA child support taxation question



## BOHO (Oct 6, 2018)

Private disability pension, Social Security disability pension, Current child support or
back child support,

Are all taxed in Italy as an expat when living there? Are there any previsisions different for disability pensions versus regular pensions? Is child support benefits taxes?

Boho


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## GeordieBorn (Jul 15, 2016)

The definitive answer probably lies in this official DTA document between the USA and Italy. Hopefully it is clearer to you than it is to a Brit like myself.


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## BOHO (Oct 6, 2018)

Ok, I used control F to find the word child support and disability. Child support showed up but disability did not. Its a little complicated for me but...
if a the parent paying the child support (not alimony) is paying with after tax dollars, he has already paid taxes on that income, then it appears the receiving party doesn't pay taxes, did I understand this? Child support is not a taxable event in the USA for the receiving party. How do you read this? 


"5. Alimony and child support payments paid to a resident of a Contracting State by a resident of the other Contracting State shall be taxable only in the first-mentioned State. However, such payments shall not be taxable in either State if the person making such payments is not entitled to a deduction for such payments in the State of which he is a resident. The term "alimony" as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, which payments are taxable to the recipient under the laws of the State of which he is a resident. The term "child support" as
used in this paragraph means periodic payments for the support of a minor child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory
support."


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## GeordieBorn (Jul 15, 2016)

Sorry BOHO I understand nothing of USA taxation, but knew there was a DTA as I've found it before for someone. I did have a quick look, but got no further than para 2a where it said the agreement did not cover SS payments.


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## BOHO (Oct 6, 2018)

thank you so much!


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## Bevdeforges (Nov 16, 2007)

The problem here is whether you're talking about US taxes or Italian taxes and for that you really need to take a book at the tax treaty. (And then again, even that may just add to the confusion.)



> 5. Alimony and child support payments paid to a resident of a Contracting State by a resident of the other Contracting State shall be taxable only in the first-mentioned State. However, such payments shall not be taxable in either State if the person making such payments is not entitled to a deduction for such payments in the State of which he is a resident. The term "alimony" as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, which payments are taxable to the recipient under the laws of the State of which he is a resident.


This is talking about alimony and child support payment - where it says "paid to a resident of a Contracting State" - that's (I assume) payments made to you in Italy. "Paid by a resident of the other Contracting State" is, I suppose your ex-husband in the US. So, in this part, support payments are taxable to the person receiving them (that's you) under Italian law.

The thing about not being taxable in either state unless the payments are deductible by the one paying them - IIRC, child support payments ARE deductible for the person paying them in the US. But alimony payments are not. So, if I'm remembering correctly, you may wind up paying Italian income tax on child support payments you receive - but not on any alimony. If I'm confusing the two, then it's the other way around. But to my recollection, one of the two is deductible for the payer while the other is not.

If you are resident in Italy you are subject to Italian income taxes. Social Security pension benefits are taxed by Italy but only if you are an Italian citizen resident in Italy. Otherwise, you pay the US income tax on Social Security benefits. (Though you may very well have to declare your benefits to the Italian tax authorities and then reduce the double taxation however they do it in Italy.)

It can be a complicated area. You may want to take a look at the Expat Tax section here in the Expat Forum for more information. https://www.expatforum.com/expats/expat-tax/
Cheers,
Bev


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## NickZ (Jun 26, 2009)

Assuming you cut and paste accurately that means IF the payer can't deduct the payment from there taxes then the receiver has a tax free benefit.

It's up to you to make sure the payer can't take a deduction.

BTW that's for both child support and alimony.

Pensions of all kinds have a higher tax free zone (basic exemption) than employment income.


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## BOHO (Oct 6, 2018)

I realize that it is different in Italy than in the USA. "Alimony" which I am not asking about, is deductible by the payer and CHARGED to the recipient. "Child support" payments are NEVER deductible by the payer and NEVER taxed to the recipient when in the USA. Typically the male earns his wages and pays the taxes there on his income. Then from his after tax income left, he pays child support. So I agree with Nickz assessment but again when I asked the expat tax person they had not run across this before. This gets more complicated per the attached document that GeorgieBorn linked too.

Thank you all!


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