Is US Social Security taxable in the US if I am a US citizen living in the UK?

No. Article 17(3) of the US-UK income tax treaty makes US Social Security paid to a UK resident taxable only in the UK, and Article 1(5)(a) keeps that rule outside the saving clause, so it applies to US citizens. IRS Publication 915 lists the United Kingdom among the countries whose US citizen residents are exempt from US tax on their benefits. The benefit is still reported on Form 1040.

How do I report treaty-exempt Social Security on Form 1040?

Enter the net benefits from box 5 of Form SSA-1099 on line 6a and nil on line 6b. Do not rely on the standard Social Security Benefits Worksheet, which applies the domestic rules and can include up to 85% of the benefit. We attach a short statement citing Article 17(3) and Article 1(5)(a) of the US-UK treaty and the taxpayer's UK residence, so the basis for the nil figure is clear.

Do I need to file Form 8833 to claim the Social Security exemption?

Not for this position alone. The Form 8833 instructions state that Regulations section 301.6114-1(c) waives reporting where a treaty reduces or modifies the taxation of income derived by an individual from pensions, annuities, social security and other public pensions. The waiver is specific, so other treaty positions on the same return, such as residence determined under the treaty, may still require Form 8833.

How does HMRC tax US Social Security received by a UK resident?

HMRC taxes it as a foreign pension. The full amount arising in the UK tax year is chargeable at your marginal income tax rates and is reported on the foreign pages of the Self Assessment return under overseas pensions and social security benefits. The 10% deduction for foreign pensions was abolished from 6 April 2017, so 100% is taxable. No foreign tax credit relief is due because no US tax is properly payable.

Is my UK State Pension also exempt from US tax under the treaty?

Not while you are UK resident. Article 17(3) covers payments by one country to a resident of the other, and a UK State Pension paid to a UK resident is not that. The general pension rule in Article 17(1)(a) is subject to the saving clause, so a US citizen reports the UK State Pension on Form 1040 and claims a foreign tax credit for the UK tax paid on it.

US Tax Return Preparation for Expats: Social Security UK

Q: What if my preparer reported my Social Security as taxable and claimed a foreign tax credit?

The return overstates US income and may have produced US tax that the treaty says is not due. HMRC will not credit that US tax, because the treaty allows UK credit only for US tax payable in accordance with the Convention. The usual remedy is an amended US return showing nil on line 6b and removing the related credit entries, filed within the US time limits for refund claims.

US tax return preparation for expats who draw US Social Security while living in the UK turns on one treaty paragraph: the benefit is taxable only in the UK, not in the United States, even when the recipient is a US citizen. Article 17(3) of the US-UK income tax treaty gives the UK the exclusive right to tax it, and the treaty's saving clause, which normally lets the US tax its citizens as if the treaty did not exist, expressly leaves that paragraph alone. The benefit still appears on Form 1040, but with a taxable amount of nil, and it is reported in full on the UK Self Assessment return as foreign pension income.

That position is right in law and frequently wrong on the page. In the returns we take over, the most common failure is a preparer, or a software default, that runs the standard Social Security worksheet, puts up to 85% of the benefit into US taxable income, and then tries to repair the damage with a foreign tax credit. This guide sets out the treaty text, the Form 1040 mechanics, the UK side and that mismatch risk, for wealthy US citizens and dual nationals resident in the UK.

How is US Social Security taxed when you live in the UK?

US Social Security paid to a UK resident is taxable only in the UK. The IRS says so in plain terms in Publication 915, at https://www.irs.gov/publications/p915, under the heading for US citizens residing abroad: US citizens who are residents of a short list of countries are exempt from US tax on their benefits, and the United Kingdom is on that list alongside Canada, Egypt, Germany, Ireland, Israel, Italy (where Italian citizenship is also required) and Romania. The same publication confirms that the Social Security Administration will not withhold US tax from the benefits of a US citizen.

What does Article 17(3) of the US-UK treaty actually say?

Article 17(3) is a residence-only rule for social security. The treaty text, published by the US Treasury at https://home.treasury.gov/system/files/131/Treaty-UK-7-24-2001.pdf, provides that payments made by a Contracting State under the provisions of the social security or similar legislation of that State to a resident of the other Contracting State shall be taxable only in that other State. Three elements have to be present: a payment by one government, made under its social security or similar legislation, to a resident of the other country.

The Treasury's Technical Explanation, at https://home.treasury.gov/system/files/131/Treaty-UK-Protocol-TE-7-22-2002.pdf, describes the paragraph as providing for exclusive residence-country taxation of social security benefits. It adds that the rule applies to social security beneficiaries whether they contributed to the system as private-sector or government employees, and that the phrase similar legislation is intended to refer to United States Tier 1 Railroad Retirement benefits.

Residence here means residence under Article 4 of the treaty, not where the benefit is paid or which passports the recipient holds. A dual US-UK national is treated no differently from a US-only citizen. Someone resident in both countries under domestic law has to work through the treaty tie-breaker before relying on Article 17(3).

Why does the saving clause not claw the benefit back for US citizens?

The saving clause is the provision that lets the United States tax its citizens as if the treaty had not come into effect. It sits in Article 1(4), and it is the reason most treaty articles do nothing for a US citizen living in London. Article 1(5)(a) then lists the benefits the saving clause does not affect. Read directly from the treaty text, that list is: paragraph 2 of Article 9 (Associated Enterprises); sub-paragraph b) of paragraph 1 and paragraphs 3 and 5 of Article 17; paragraph 1 of Article 18 (Pension Schemes); and Articles 24 (Relief From Double Taxation), 25 (Non-discrimination) and 26 (Mutual Agreement Procedure).

Paragraph 3 of Article 17 is on the list. The Technical Explanation draws the conclusion in a single sentence: paragraphs 3 and 5 are exceptions to the saving clause, and accordingly a US citizen who is a resident of the United Kingdom will not be subject to US tax on any US social security benefits, child support payments or alimony. That sentence is the authority we cite on the return file.

The contrast with the rest of Article 17 is instructive. Sub-paragraph 1(a), the general rule that pensions are taxable only in the residence state, is not on the list, and the Technical Explanation confirms that it, and paragraphs 2 and 4 on lump sums and annuities, remain subject to the saving clause. Only the items the treaty names are protected.

What would the US tax without the treaty?

Under the default rules in Publication 915, part of a US person's Social Security benefit is included in taxable income once other income passes certain base amounts. Generally up to 50% of the benefit is taxable, but up to 85% can be taxable where the total of one-half of the benefits and all other income is more than $34,000, or $44,000 for a married couple filing jointly, or where the taxpayer is married filing separately and lived with their spouse at any time during the year. Those are the figures in the 2025 edition of the publication.

For the readers of this site those thresholds are academic: an investor, banker or business owner with substantial other income would be at the 85% inclusion every year. A married person filing separately who lived with their spouse goes straight to the 85% calculation, and many Americans in the UK file that way because their spouse is not a US person. That is the outcome the treaty switches off.

US tax return preparation for expats: how does a treaty-exempt benefit go on Form 1040?

The benefit is reported, not omitted. The Social Security Administration issues Form SSA-1099 each year and the IRS receives the same information, so a return that leaves the benefit off entirely invites a matching enquiry. Publication 915 gives the reporting rule for benefits that are not taxable: report the net benefits, being the total from box 5 of all Forms SSA-1099, on Form 1040 line 6a, and enter zero on line 6b. The publication frames that instruction around the domestic worksheet rather than the treaty, and it does not set out a separate treaty procedure, so the same two lines are the natural home for a treaty-exempt benefit. The mechanics on the 2025 form are as follows.

Box 5 of Form SSA-1099 (net benefits, which is box 3 less any repayments in box 4) goes on line 6a. Do not reduce it for Medicare premiums or anything else deducted before payment.
Line 6b, the taxable amount, is nil. The standard Social Security Benefits Worksheet is not the basis for the figure, because it applies the domestic inclusion rules that the treaty overrides.
Line 6c (lump-sum election) and line 6d (married filing separately and living apart all year) are checkboxes that do not change the treaty result and should not be ticked by reflex.
Box 6 of Form SSA-1099 shows any voluntary federal income tax withheld. Any figure there is claimed as a payment on the return and refunded.
A short attached statement identifying the benefit, the taxpayer's UK residence and Article 17(3) with Article 1(5)(a) is our standing practice. It is not a prescribed IRS form, but it answers the obvious question before it is asked.

The practical obstacle is software. Most preparation packages calculate line 6b automatically from the worksheet and will produce an 85% inclusion for a high-income filer unless the preparer overrides it. When we review a prior-year return for a new client receiving Social Security, line 6b is the first number we look at.

Is Form 8833 required for the Article 17(3) position?

Form 8833 is the IRS form for disclosing a treaty-based return position, meaning a claim that a treaty overrules or modifies a provision of the Internal Revenue Code and thereby reduces tax. Excluding Social Security under Article 17(3) is such a position, and the general rule in the form's instructions, available from https://www.irs.gov/forms-pubs/about-form-8833, is that it must be disclosed unless reporting is specifically waived.

Here it is waived. The instructions to Form 8833 (revision December 2022) state that Regulations section 301.6114-1(c) waives reporting for certain positions, and the first item in the list of waived positions is that a treaty reduces or modifies the taxation of income derived by an individual from dependent personal services, pensions, annuities, social security, and other public pensions. A US citizen excluding US Social Security under Article 17(3) falls squarely within that wording, so Form 8833 is not required for this position alone.

Two cautions. The instructions warn that some waivers are narrow, so the waiver for Social Security should not be stretched to other treaty claims on the same return. And where residence itself is determined under the treaty rather than under the Code, the instructions list that as a specifically reportable position, so a return can need Form 8833 for a different reason.

Is US tax withheld from the benefit, and what does Form W-4V do?

No US tax is withheld from the Social Security of a US citizen by default: Publication 915 states that the SSA will not withhold US tax from the benefits of a US citizen. Withholding at source is a nonresident alien issue. The publication explains that for nonresident aliens 85% of the benefit is taxed at a 30% rate unless a treaty exempts it, and that residents of the United Kingdom are exempt.

Form W-4V, Voluntary Withholding Request, is the form a recipient uses to ask the payer to withhold federal income tax from Social Security. The current form, at https://www.irs.gov/forms-pubs/about-form-w-4-v, offers withholding at 7%, 10%, 12% or 22% of each payment and no other percentage, and has a line to stop withholding. We regularly see UK-resident clients with a W-4V election still running from their years in the United States. The tax comes back on the return, but it is an interest-free loan to the US Treasury on income the US has no right to tax.

How does HMRC tax US Social Security on the Self Assessment return?

HMRC taxes US Social Security as a foreign pension. HMRC's Employment Income Manual at https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim75500 explains that liability on a foreign pension arises only if the recipient is UK resident, and that from 6 April 2017 the taxable amount is the full amount of the payment arising in the tax year. For payments arising before that date the taxable amount was 90%.

That last point still causes errors, because older guidance and long-standing spreadsheets apply a 10% deduction. HMRC's notes to the SA106 foreign pages, published at https://www.gov.uk/government/publications/self-assessment-foreign-sa106, are explicit: from 6 April 2017 tax is due on 100% rather than 90% of a foreign pension, annuity or social security benefit regardless of when the recipient started to take it, and the 10% deduction has been abolished.

The reporting sits on the foreign pages of the return, in the section HMRC heads overseas pensions, social security benefits and royalties. The points we check on every file are these.

The amount entered is the benefit arising in the UK tax year, 6 April to 5 April, not the calendar-year figure on Form SSA-1099. The two will almost never match, and the reconciliation should be kept.
The figure is the gross benefit before Medicare premiums are deducted. The premiums are a use of the benefit, not a reduction in it, and we are not aware of any UK relief for them.
No foreign tax credit relief is claimed, because no US tax is properly due. If voluntary US withholding was in place, the remedy is a US refund, not a UK credit.
The entry is described as US Social Security so that it is not confused with a private US pension, which follows different treaty paragraphs.

Which exchange rate applies on each return?

On the US return nothing needs converting, because the benefit is paid and reported in dollars. On the UK return it must be converted to sterling: HMRC's SA106 notes say to convert overseas income into UK pounds using the exchange rate at the time the income arose, and the basis chosen should be applied consistently from year to year.

The reverse conversion matters for UK-source income reported to the IRS, including the UK State Pension discussed below. The IRS states at https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates that it has no official exchange rate, that the general rule is the spot rate when an item is received, and that it generally accepts any posted exchange rate that is used consistently.

What about a UK State Pension received by the same person?

Many long-term UK residents with US citizenship receive both a US Social Security benefit and a UK State Pension, and it is tempting to assume one treaty paragraph covers both. It does not. The UK State Pension is taxable in the UK as part of total income, as GOV.UK explains at https://www.gov.uk/tax-on-pension. On the US return the position is different from US Social Security, and the reason is in the wording of Article 17(3): it covers payments by one state to a resident of the other state. A UK State Pension paid to a UK resident is a payment by the UK to its own resident, so that paragraph is not engaged.

What remains is the general pension rule in Article 17(1)(a), which the Technical Explanation confirms is subject to the saving clause. The United States therefore keeps its right to tax a US citizen on the UK State Pension. Publication 915 adds the domestic characterisation: foreign social security benefits are taxable as annuities unless they are exempt from US tax or treated as a US social security benefit under a tax treaty. For a UK-resident American, then, the UK State Pension is reported as income on Form 1040, converted to dollars, and the UK tax paid on it is relieved through the foreign tax credit on Form 1116.

Does the Windfall Elimination Provision still reduce the benefit?

No. The Windfall Elimination Provision reduced the US Social Security benefit of people who also received a pension from work not covered by US Social Security, which caught many Americans with long UK careers. The Social Security Administration confirms at https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html that the Social Security Fairness Act, signed into law on 5 January 2025, ended both the Windfall Elimination Provision and the Government Pension Offset, and that December 2023 was the last month those rules applied. The tax relevance is a larger benefit and, where arrears were paid, a larger figure on Form SSA-1099 and on the UK return for that year.

How do the Medicare premiums shown on Form SSA-1099 fit in?

Form SSA-1099 itemises amounts deducted from the benefit before it was paid, and Medicare premiums are the usual entry. Publication 915 is specific that these deductions are added back in arriving at box 3, and that the net benefits in box 5 are not to be reduced by any of them. It also notes that premiums can be higher for those with higher income, which is the position of most readers here.

The consequence is that the cash arriving in the bank account is lower than the figure that goes on each return. A client who reconciles to bank statements will under-report on the UK side unless the premiums are added back.

Why is no foreign tax credit needed, and what goes wrong when one is claimed?

A foreign tax credit relieves US tax on income that both countries tax. Where line 6b is nil there is no US tax on the benefit and nothing to relieve, so the correct return has no Form 1116 entry for Social Security at all. The error we see takes one of two forms.

In the first, the preparer includes up to 85% of the benefit on line 6b and claims a credit for the UK tax on it. The credit limitation on Form 1116 is built on foreign-source income, and a benefit paid by the US government does not sit naturally there. The benefit also inflates adjusted gross income, which feeds into every income-tested calculation on the return. Where the credit falls short, the client pays US tax the treaty says is not due.

In the second, the benefit is correctly excluded on line 6b but the UK tax attributable to it is still carried onto Form 1116 with the client's other UK tax. IRS Publication 514, at https://www.irs.gov/publications/p514, states the general principle that a credit cannot be taken for foreign taxes on certain income that is excluded from US gross income, and deals expressly with the foreign earned income and housing exclusions. It does not address treaty-exempt Social Security in terms. In the returns we prepare we take the conservative position and leave that UK tax out of the credit computation, so that credits and carryovers relate only to income the US actually taxes.

The mismatch has a UK dimension too. If US tax was paid on the benefit in error, HMRC will not give credit for it. Article 24(4)(a) of the treaty allows credit against UK tax only for US tax payable in accordance with the Convention, and the SA106 notes say foreign tax credit relief requires that the income was properly charged under the other country's law after reasonable steps to claim all available reliefs and exemptions there. The fix is an amended US return claiming the refund, within the US time limits for refund claims, not a UK credit.

Worked illustration: a UK-resident American with both pensions

The following is an illustration only. All figures are assumed, the exchange rate of $1.25 to £1 is an assumption, and the amounts are taken to be the same for the US calendar year and the UK tax year. Margaret is a US citizen who has lived in London for thirty years and is UK resident under the treaty. She has substantial investment and partnership income, and we assume a UK marginal income tax rate of 45% with no personal allowance available.

Her Form SSA-1099 shows benefits paid in box 3 of $50,220, nil repaid in box 4 and net benefits in box 5 of $50,220. The description of box 3 shows Medicare premiums deducted of $2,220, so $48,000 reached her bank account. She also receives a UK State Pension, assumed at £9,000 for the year.

On Form 1040, line 6a shows $50,220 and line 6b shows nil, with a statement citing Article 17(3) and Article 1(5)(a). No Form 8833 is filed for this position because the reporting is waived. The UK State Pension is reported as income of $11,250 (£9,000 at the assumed rate) and the UK tax on it, £4,050 at the assumed 45%, or about $5,063, is available as a foreign tax credit against the US tax on that income.

On her UK return the foreign pages show US Social Security of £40,176 ($50,220 at the assumed rate), with no foreign tax and no credit relief claimed. UK tax on it at the assumed rate is about £18,079.

Now the incorrect version. Her previous preparer let the software run the worksheet, which put 85% of the benefit, $42,687, on line 6b, and then claimed a credit for UK tax. Her adjusted gross income was overstated by $42,687, her foreign tax credit computation was distorted by income that should never have been in it, and HMRC would not credit any US tax that resulted. Correcting it meant amended US returns for the open years. Only line 6b had changed.

What about state returns and other Social Security benefits?

For anyone who still files a US state return, states apply their own rules to Social Security and are not generally bound by federal income tax treaties, so the state position must be checked separately. Survivor benefits paid under the same US legislation raise the same treaty question but are outside the scope of this guide.

Social Security is rarely the largest number on a wealthy client's return, which is why it is so often the least examined. Our US expat tax return service prepares the US and UK returns together so that the two sets of figures are reconciled before either is filed.