Understanding how Social Security income is treated for U.S. tax purposes can be especially complex for those living abroad or receiving foreign benefits. This guide explains key points about reporting Social Security income, how Totalization Agreements work, when you need to file a U.S. tax return, and when Social Security benefits are taxable.

International Social Security agreements, known as Totalization Agreements, serve two key purposes:

Under a Totalization Agreement, if a worker has some U.S. coverage but not enough to qualify for benefits, SSA will count periods of coverage that the worker has earned under the Social Security program of an agreement country to fill the gap.

In the same way, a country party to an agreement with the United States will consider a worker's coverage under the U.S. Social Security program so that the worker may qualify for that country's Social Security benefits.

A U.S. person residing in a country without a Totalization Agreement with the U.S. can only earn U.S. Social Security credits if they are self-employed. Because there is no Totalization Agreement, even if you pay into your local country's Social Security system, these contributions cannot be transferred into U.S. Social Security credits and won't count against your U.S. self-employment taxes. However, you can list foreign Social Security payments as a foreign tax credit on your U.S. tax return, which may help reduce your total tax owed.

If you pay social security contributions to a country that does not have a Totalization Agreement with the U.S., those contributions will NOT count against your U.S. self-employment taxes. However, you can list foreign Social Security payments as a foreign tax credit on your U.S. tax return.

Therefore, if you are employed by a foreign employer yet have elected to contribute to the U.S. Social Security system, you may report your wages as "Other Self-Employment income reported as wages" on line 7 of Form 1040. You must pay 15.3% of the amount on line 57 of Form 1040 as Self-Employment tax. Note that you will generate U.S. Social Security credits to pay this added tax.

The treatment of Social Security and other public pension benefits in the Convention between the United States of America and the Swiss Confederation for the avoidance of double taxation concerning taxes on income differs from the U.S. model, under which the source State retains exclusive taxation rights.

This treatment is necessary to avoid the double taxation of U.S. Social Security benefits and other public pension benefits from Swiss residents that both countries would otherwise tax. The United States, as the source country in this situation, taxes 85 percent of the benefits that U.S. citizens and nonresident aliens living in Switzerland receive. As the country of residence, Switzerland taxes the U.S. benefits received by those individuals and does not provide any tax credits to offset the taxes paid on the same benefits in the U.S.

Because Switzerland cannot offer tax credits for people in these circumstances, even by treaty, these individuals are subject to a double tax burden. (No special double taxation relief rule is required in the reverse situation where Swiss Social Security benefits are paid to U.S. residents because Switzerland does not tax benefits in a case where it is the source country. If Switzerland were to impose a tax on such payments in the future, a U.S. foreign tax credit would be available under the general provisions of paragraph two of Article 23.

If you are a non-U.S. individual (who isn't a U.S. citizen without a Green Card) receiving Social Security survivor’s benefits, taxes from your payments are automatically withheld by the IRS. Because of this withholding, you are not required to file a U.S. tax return (given that the withholding rate established by the IRS aligns with the tax liability on survivor's benefits received by nonresident individuals).

You will need to file a nonresident tax return (Form 1040NR) if you are earning income from other U.S. sources.

If you are single, at least 65 years old, and U.S. Social Security benefits are your only source of worldwide income, you likely do not need to file a U.S. tax return. However, if you earned other income (from work, self-employment, retirement distributions, investments, or tax-exempt interest) that exceeded $16,850 (for the 2024 tax year), excluding Social Security, you must file a U.S. tax return. See the minimum gross income required to file for each specific filing status.

Refer to the table below for the minimum gross income (for the 2024 tax year) required to file based on your specific filing status. For up-to-date information, refer to our website article minimum gross income required to file taxes.

Taxpayers receiving Social Security benefits (such as monthly retirement, survivor, and disability benefits) may need to pay federal income tax on a portion of their benefits, depending on their combined income and filing status.

Example: Let’s say you’re single, over 65, and received:

You would calculate: $9,000 (half of SS) + $8,000 = $17,000
Since $17,000 is less than $25,000, your Social Security is not taxable, and your gross income is only $8,000, which is below the $16,850 threshold. Therefore, you don't need to file.