Category:USA Financial Topics:US-Taxation

From Wiki


State pensions (US social security and UK state pensions) are covered under the tax treaty and are ONLY taxable in the country of residence. If you live in the US and get a UK state pension you need to fill out an HMRC US-Individual-2002 to claim relief from UK tax

http://www.hmrc.gov.uk/cnr/us_individual_2002.pdf

along with an IRS form 8802 Residency Certification

http://www.irs.gov/pub/irs-pdf/f8802.pdf

and send both forms (with $35 fee) to the IRS in Philadelphia. They will send you a 6601 Residency Certificate back and also send the forms off to HMRC.

So now you will get your UK state pension with no UK tax withheld and you simply include it on line 21 of your 1040 and write something like "UK state social security pension" in the description.

The best bit of this is that at no point do you have to quote tax treaty Articles. If you are UK resident and get a US SS, the equivalent process is more complicated.