How to Report German Social Security on Your U.S. Tax Return

German social security received by someone living in the United States goes on Form 1040 lines 6a and 6b, the same lines used for a U.S. Social Security check. To report German social security on a U.S. tax return, you convert the euro payments to dollars, apply the Internal Revenue Code Section 86 formula to find the taxable portion, and enter the gross and taxable amounts on those two lines. The U.S.-Germany tax treaty is what makes this work: Article 19(2) gives the United States exclusive taxing rights over the benefit and directs the IRS to treat it as if it were a U.S. Social Security benefit.¹

If you live in Germany rather than the United States, the treaty reverses the result and Germany taxes the benefit; the reporting steps below assume you are a U.S. resident or citizen living in the U.S.²

Why It Goes on the Social Security Line

Article 19, paragraph 2 of the U.S.-Germany tax treaty says that social security paid by one country to a resident of the other is taxable only in the country of residence, and the receiving country must treat the payment “as though it were a social security benefit paid under the social security legislation of” that country.¹ That second instruction is why German Rente lands on the Social Security lines of Form 1040 rather than being reported as a foreign pension on Schedule 1.

The treaty’s Savings Clause normally lets the U.S. tax its citizens and residents as if a treaty did not exist, but the Protocol lists Article 19(2) as an exception, so the treaty’s social-security treatment controls.¹

Step One: Convert Euros to Dollars

Every figure on a U.S. return has to be in dollars. The IRS tells taxpayers to use the exchange rate prevailing when the income is received, but for monthly pension payments spread across the year, most filers use the IRS yearly average rate rather than converting each deposit at its daily spot rate.³ Both are acceptable.

To use the yearly average, divide the total euros received during the year by the Euro Zone rate from the IRS yearly average table for that tax year.⁴ The 2025 yearly average rate for the euro was 0.886, so €12,000 received during 2025 converts to roughly $13,544.

You will not receive an SSA-1099 for a German benefit. Keep your Rentenbescheid, the annual payment notices from the German pension authority, bank statements showing the deposits, and a note of which exchange rate you used. If the IRS later asks how you arrived at the dollar figure, those records are the answer.

Step Two: Figure the Taxable Portion

Because the treaty requires the IRS to treat the German benefit as U.S. Social Security, the taxable percentage comes from Internal Revenue Code Section 86.⁵ Depending on your income, somewhere between 0% and 85% of the benefit is taxable. The driver is “combined income,” meaning your adjusted gross income plus any tax-exempt interest plus half of all social security benefits (both the German benefit and any U.S. Social Security).

For single filers:

Combined income below $25,000: none of the benefit is taxable.
Combined income between $25,000 and $34,000: up to 50% is taxable.
Combined income above $34,000: up to 85% is taxable.

For married couples filing jointly:

Combined income below $32,000: none of the benefit is taxable.
Combined income between $32,000 and $44,000: up to 50% is taxable.
Combined income above $44,000: up to 85% is taxable.

Married filing separately with any time living together during the year drops the base amount to zero, so up to 85% of the benefit is taxable regardless of income.⁵ If you also receive U.S. Social Security, combine both benefits before running the calculation.

The Social Security Benefits Worksheet in the Form 1040 instructions walks the math line by line.⁶

Step Three: Enter It on Form 1040

The gross dollar amount of the German benefit goes on line 6a, labeled “Social security benefits.” The taxable portion from the worksheet goes on line 6b.⁷ If you also receive U.S. Social Security, combine the two gross amounts on 6a and the two taxable amounts on 6b.

Tax software usually expects an SSA-1099. Since there isn’t one, enter the converted dollar figure manually in the Social Security benefits field. Attaching a brief statement noting that the amount is German social security reported as U.S. Social Security under Article 19(2) of the U.S.-Germany treaty is a sensible precaution.

Do You Need to File Form 8833?

Form 8833 is the usual disclosure for a treaty-based return position that overrides the Internal Revenue Code, and skipping it when required triggers a $1,000 penalty under IRC Section 6712.⁸ For German social security, you do not need to file it. Regulation Section 301.6114-1(c) waives the Form 8833 filing requirement for individuals whose treaty position reduces or modifies the taxation of income from social security and other public pensions, and reporting under Article 19 fits that waiver.⁹

Some practitioners still file Form 8833 as a protective measure, listing Germany as the treaty country, Article 19(2) as the provision, and IRC Section 86 as the domestic rule being modified. Filing it when not required carries no downside, and skipping it when the waiver applies carries no penalty.

If You Receive a Lump-Sum Back Payment

Germany sometimes issues retroactive lump sums covering benefits owed for prior years. The default rule is that the entire payment goes into income in the year you receive it, even if it covers earlier periods.¹⁰

A special lump-sum election lets you recalculate the taxable portion by attributing the back-payment amount to the earlier year it covers and using that year’s income to run the Section 86 formula. You do not amend the earlier return; you add the recalculated taxable amount to the current year’s return and check the box on Form 1040 line 6c to make the election.¹⁰ Publication 915 contains the worksheets to compare the two methods; take whichever produces the lower taxable amount.

If Germany Withheld Tax on the Benefit

Because Article 19(2) gives the U.S. exclusive taxing rights, Germany should not be withholding income tax on your Rente once you are established as a U.S. resident. In practice, Germany may withhold until you formally claim the treaty exemption. Article 29 of the treaty requires the withheld tax to be refunded on application.¹

The claim is filed with the German Federal Central Tax Office (Bundeszentralamt für Steuern), which generally requires proof of U.S. tax residence through an IRS-issued certificate. Once the exemption is on file, future payments should arrive without German tax deducted.

The U.S. foreign tax credit on Form 1116 is a poor substitute for pursuing the German refund here. The credit only offsets U.S. tax on foreign-source income, and the treaty’s instruction to treat the benefit as U.S. Social Security may re-source it as domestic.¹¹ The refund route is the better one; if a meaningful amount was withheld, speak with a cross-border tax professional before choosing between them. The Foreign Earned Income Exclusion on Form 2555 does not apply at all, because it covers wages and self-employment income rather than pensions.¹²

If Benefits Deposit Into a German Bank Account

Having the pension paid into a German account can trigger two reporting obligations that sit outside your income tax return.

The FBAR (FinCEN Form 114) is required when the combined value of your foreign accounts exceeds $10,000 at any point during the year. It is filed electronically through the BSA E-Filing System, due April 15 with an automatic extension to October 15. A non-willful failure can draw a penalty of up to $10,000 per violation.¹³

FATCA reporting on Form 8938 is filed with your tax return. For a single filer living in the U.S., it applies if foreign financial assets exceed $50,000 on the last day of the year or $75,000 at any time during the year. For a joint return, the thresholds are $100,000 and $150,000.¹⁴ Neither filing is required if the balance stays below the FBAR threshold, but retirees with long histories in Germany often exceed it without realizing. The penalties are steep enough that these obligations should be checked every year the German account is open.

1
Internal Revenue Service. Convention Between the United States of America and the Federal Republic of Germany
2
U.S. Department of State. Convention Between the United States of America and Germany
3
Internal Revenue Service. Foreign Currency and Currency Exchange Rates
4
Internal Revenue Service. Yearly Average Currency Exchange Rates
5
Office of the Law Revision Counsel. 26 USC 86 – Social Security and Tier 1 Railroad Retirement Benefits
6
Internal Revenue Service. Instructions for Form 1040 – Lines 6a, 6b, 6c, and 6d
7
Internal Revenue Service. Social Security Income
8
Office of the Law Revision Counsel. 26 USC 6712 – Failure to Disclose Treaty-Based Return Positions
9
Internal Revenue Service. Form 8833 – Treaty-Based Return Position Disclosure
10
Internal Revenue Service. Publication 915 – Social Security and Equivalent Railroad Retirement Benefits
11
Internal Revenue Service. Instructions for Form 1116
12
Internal Revenue Service. Instructions for Form 2555 – Foreign Earned Income
13
Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
14
Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers