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I am a dual U.S./Serbian citizen living in Serbia and currently on maternity leave, fully paid by the Serbian government. I cannot find any information on whether I’m supposed to report that as a foreign income when filing my taxes for 2017?

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    I'm not 100% certain, but if you would have to report the income if you weren't on maternity leave (all other things being equal), then from what I've seen elsewhere on this site, I'm pretty sure you'd have to report it... it's still income, even if you don't have to "do anything" to earn it. – TripeHound Jan 24 '18 at 14:30
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    thanks TripeHound. it’s sort of a social security benefit here, the pay I’m getting while I’m on maternity leave, hence my question... – Tijana Jan 24 '18 at 19:16
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As a US citizen, you will need to report this income on line 21 of your 1040 (Other income).

As this maternity benefit is paid by the Serbian government and not your employer, it doesn't appear to qualify as foreign earned income, which the IRS describes as "wages, salaries, professional fees, and other compensation received for personal services you performed in a foreign country".

If you paid income tax in Serbia on these benefits, you might be able to claim foreign tax credit to be offset against your US income tax liability. You would list both the income and the tax paid on Form 1116.

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    One caveat here on a good answer - the IRS might view maternity leave pay as an extension of employment income depending on whether employment income was needed to have been earned in Serbia to earn the benefit. I say that with no knowledge of maternity benefits, only that some semi-employment based payments in the US do sometimes get considered as employment income [and therefore, foreign earned income, and therefore, eligible for the Foreign Earned Income exclusion]. – Grade 'Eh' Bacon Jan 30 '18 at 21:41
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    Good point. The summary in the ILO document below indicates that maternity leave in Serbia is available to "an employed woman", but doesn't make clear whether employees contribute to funding it. ilo.org/dyn/travail/docs/2403/… – Rupert Clayton Jan 30 '18 at 22:56

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