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My husband and I are retiring in France. Both of us have US Social Security benefits due us. I am a US citizen, spouse is a non-resident alien. If we elect to file a joint 1040 so that he is treated as a US taxpayer, will we then not have to pay tax on his benefits?
If so, how would we go about getting the withheld tax back (since I understand the tax is withheld at source)?
Thank you in advance for your response!
For many people, Social Security benefits are taxable in part as ordinary income, and Social Security offers to withhold tax (at certain specific rates) from the benefit paid and send the money to the IRS as tax withheld. As much as 85% of the benefit might be taxable income to the beneficiary. The exact taxable amount is computed on a Worksheet that is not sent to the IRS with the tax return and it takes into account things like the foreign earned income claimed on the tax return. This is true regardless of residence of the Social Security beneficiary. Since the OP's husband is a nonresident alien, there may be (I am not sure about this) mandatory income tax withholding at 30% from the benefit paid; the mandatory 30% withholding rate certainly applies for IRA and 401(k) distributions sent to nonUS addresses.
