# Is UK resident's UK State Pension taxable by US?



## iota2014 (Jul 30, 2015)

I'm trying to figure out whether I should put my UK State Pension as taxable or not taxable (on 1040), and, if not taxable, which paragraph of DTT I should rely on.

Article 17 Paragraph 4 says



> Any annuity derived and beneficially owned by an individual (“the annuitant”) who is a resident of a Contracting State shall be taxable only in that State. The term "annuity" as used in this paragraph means a stated sum paid periodically at stated times during the life of the annuitant, or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration (other than in return for services rendered).


Is this the correct paragraph to use?

Appreciate any assistance.


----------



## Bevdeforges (Nov 16, 2007)

By my reading, the sentence just before the one you've cited says that a UK State pension paid to a resident of the UK is taxable only by the UK (i.e. the state in which you are resident). Frankly, I see no reason to even include it on your 1040 at all. 

What TaxAct seems to do is to give you the option to report it on line 16a (Pensions) but indicating that 0 is the taxable amount. If they have questions, the IRS will be in touch, but don't hold your breath waiting to hear from them.
Cheers,
Bev


----------



## iota2014 (Jul 30, 2015)

Thanks Bev. I want paragraph 3 to say that, and thought when I first read it that it said that, but then I read a thread in another forum arguing that it actually says a UK state pension paid to _a resident of the US_ is taxable only by the UK. Which on rereading does seem to be what it says, though maybe both residence situations apply and it just doesn't make that clear.



> Notwithstanding the provisions of paragraph 1 of this Article, payments made by a Contracting State [UK] under the provisions of the social security or similar legislation of that State [UK] _to a resident of the other Contracting State_ [US] shall be taxable only in that other State [US].


I'm probably over-thinking it, but I'm looking ahead to renouncing - want to make sure everything is in order.


----------

