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Paid maternity leave in my country of residence is paid by the government as a social security insurance benefit, rather than by the employer. Is it treated as taxable income on my US return?

Edit: Adding more information about the situation. The person is a dual US-Israeli citizen residing in Israel.

  • More information, e.g. which foreign country, and your own status (tax resident of US or of the foreign country? citizen of which country?) etc would be of immense help. – Dilip Sarwate Apr 19 '15 at 16:14
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Assuming you're a US citizen/tax resident filing a form 1040, it is. Unless your country has a tax treaty with the US to say otherwise.

Most countries that do have a tax treaty with the US, have a special clause that discusses this type of income, however not every country has a tax treaty with the US (most don't, in fact), and not every country that does extends this provision on US citizens (most do).


Specifically to Israel: Bituah Leumi (Social Security) payments are exempt under the Israeli-US tax treaty. You're receiving it from Israel, and for the purposes of the US tax law - you're a resident of the US, thus you qualify under article 21. In fact, the treaty says that neither country will tax that, so you should check with the Bituah Leumi office about this (maternity payment is otherwise taxable income in Israel).

  • Thank you for pointing me to the tax treaty. Specifically, note article 21. To my reading, it does not seem to exempt Israeli Social Security (Bituach Leumi) payments to an Israeli resident. However, looking around the internet, there seems to be nearly a consensus that it is, in fact, excluded. tinyurl.com/mhpq9hq tinyurl.com/kt29f5u tinyurl.com/lhxggcs (Page 6, "Tax Treaties") – Yosef Weiner Apr 20 '15 at 18:35
  • I don't think Article 21 covers all payments from Bituach Leumi. None of the above sources mention maternity leave. Since it is taxable in Israel, why should it be excluded in the US? – Aryeh Leib Taurog May 4 '17 at 10:02

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