# US Social Security question



## stefano1952

Ciao tutti!,
Hope someone can answer this. I have been told by the Italian Consulate in Detroit Michigan that if a US Cittizen retires outside of the USA and collects Social Security retirement benifits, that he or she does not get the full ammount deposited in their foreign bank account, is this true?

Grazie


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## Bevdeforges

The Italian Consulate is probably not the best source for information about US Social Security benefits. But I actually may have some idea what they are talking about.

There is a Social Security treaty between the US and Italy. The good news is that US Social Security benefits paid to an Italian citizen resident in Italy are NOT reportable on your US tax returns and don't count toward the determination of "gross income" at all. 

The bad news is that I think this means that US Social Security benefits are taxed by the Italian government if you're resident in Italy - but you'd have to check on this. (I don't know how the system works in Italy, but the bank you have it deposited into may be the one to withhold the Italian taxes.) This actually doesn't have anything to do with your US citizenship - it applies to all Italian citizens resident in Italy who draw US social security.

There is also a provision called the Windfall Elimination Provision (WEP) that means that the US government reduces your US Social Security benefits by a set amount if you are eligible for a "foreign pension" of any sort. This amount is usually documented on your Social Security statement if you have it sent to an overseas address. I believe this applies equally to US citizens and non-citizens, no matter where you are resident when you start drawing your social security benefits.
Cheers,
Bev


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## stefano1952

*SS question*



Bevdeforges said:


> The Italian Consulate is probably not the best source for information about US Social Security benefits. But I actually may have some idea what they are talking about.
> 
> There is a Social Security treaty between the US and Italy. The good news is that US Social Security benefits paid to an Italian citizen resident in Italy are NOT reportable on your US tax returns and don't count toward the determination of "gross income" at all.
> 
> The bad news is that I think this means that US Social Security benefits are taxed by the Italian government if you're resident in Italy - but you'd have to check on this. (I don't know how the system works in Italy, but the bank you have it deposited into may be the one to withhold the Italian taxes.) This actually doesn't have anything to do with your US citizenship - it applies to all Italian citizens resident in Italy who draw US social security.
> 
> There is also a provision called the Windfall Elimination Provision (WEP) that means that the US government reduces your US Social Security benefits by a set amount if you are eligible for a "foreign pension" of any sort. This amount is usually documented on your Social Security statement if you have it sent to an overseas address. I believe this applies equally to US citizens and non-citizens, no matter where you are resident when you start drawing your social security benefits.
> Cheers,
> Bev


Thanks Bev.
You are probably right. I know the Social Security benifits are reduced if one has an extra income of ove $8,000.00 per year, assuming that one draws the SS benifits at the age of 62, but not after the age of 66.
I just do not know how much the Italian Tax system might ding me!


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## pratomorone

Bevdeforges said:


> The Italian Consulate is probably not the best source for information about US Social Security benefits. But I actually may have some idea what they are talking about.
> 
> There is a Social Security treaty between the US and Italy. The good news is that US Social Security benefits paid to an Italian citizen resident in Italy are NOT reportable on your US tax returns and don't count toward the determination of "gross income" at all.
> 
> The bad news is that I think this means that US Social Security benefits are taxed by the Italian government if you're resident in Italy - but you'd have to check on this. (I don't know how the system works in Italy, but the bank you have it deposited into may be the one to withhold the Italian taxes.) This actually doesn't have anything to do with your US citizenship - it applies to all Italian citizens resident in Italy who draw US social security.
> 
> There is also a provision called the Windfall Elimination Provision (WEP) that means that the US government reduces your US Social Security benefits by a set amount if you are eligible for a "foreign pension" of any sort. This amount is usually documented on your Social Security statement if you have it sent to an overseas address. I believe this applies equally to US citizens and non-citizens, no matter where you are resident when you start drawing your social security benefits.
> Cheers,
> Bev


Until this year, Social Security pension benefits paid to US citizens were not taxed by the Italian Government. However, that has changed. I was advised by my Italian accountant that my pension is now subject to Italian income tax. However, this is in direct violation of the 1984 tax treaty between the Italian Government and the US Government. If you are receiving Social Security benefits in Italy and you are a US citizen, you are now subject to Italian taxation.

Oh, joy!!


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## NickZ

pratomorone said:


> Until this year, Social Security pension benefits paid to US citizens were not taxed by the Italian Government. However, that has changed. I was advised by my Italian accountant that my pension is now subject to Italian income tax. However, this is in direct violation of the 1984 tax treaty between the Italian Government and the US Government. If you are receiving Social Security benefits in Italy and you are a US citizen, you are now subject to Italian taxation.
> 
> Oh, joy!!


Social Security Agreement | United States Diplomatic Mission to Italy

It's always been reportable. Which meant you were taxed unless below the various limits. 

Nothing new. Nothing violated.


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