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Non-US citizen receives social security — is it taxable? Explained in plain English.

U.S. Social Security Payments to non-resident

U.S. Social Security benefits may be paid to non-resident aliens. Those payments may be for work previously performed in the US or spousal benefits.

Generally Social Security benefits paid to non-resident alien are reported on form 1042-S with income code 22. The applicable federal tax amount will be withheld at source. The benefit recipient will receive payment net of tax withholding.

WIthholding Rates & US Income tax filing

Default tax withholding rate on benefits paid to non-US persons is 30%. The withholding is applied on 85% of payment. Thus, if annual benefit, is $10,000 then 30% tax will be withheld from $8,500 — totalling $2,550.

If this is the only US-sourced income then the non-resident alien receiving payments does not need to file a U.S. tax return. This tax will not be refunded, and the required tax amount is being withheld at source.

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