Thai wife being taxed on her US SS

[jlm53]

Went to Udon tax dept. My US Social Security is tax free,but my wife's is not they he said Article 20 has a provision in Artcle 21 paragraph 2 Government service.That part is correct,but nothing in there saying she is not tax free.The paper he gave me isn't even in the US & Thai Tax treaty.Anybody ran into anything like this?

By the way my wife owes over 20,000฿ according to the tax office.

[gamb00ler]

The thread title refers to you wife's SS benefits but your post is referencing Article 21 which deals with pensions paid to government employees.  If indeed her pension is NOT paid for past employment by a US government agency/department but for other work that is covered by Social Security, it would be covered by Article 20 paragraph 2... not by Article 21.

 

There is no distinction in the US-Thai tax treaty Article 20 depending on citizenship of the SS recipients.

 

If your wife is receiving both a government pension and Social Security, then the portion earned from work covered by a government pension would be taxable in Thailand, but the portion from SS would not.

 

Note: recent US federal law was changed so that former governmental employees are no long penalized by SSA through benefit reduction due to Government Pension Offset (effective Jan. 1, 2024).

 

US-Thai treaty Article 20 paragraph 2:

 

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

Article 21 paragraph 2:

 

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

 

[jlm53]

My wife worked at a hotel for over 20 years.The tax man decided that Article 21 pertained to her being a Thai national.The paper he gave me for reference I don't recognize from the US and Thai Tax treaty.It looks like a poor translation.I will post  a copy of what he gave me.

[gamb00ler]

1 minute ago, jlm53 said:

My wife worked at a hotel for over 20 years.The tax man decided that Article 21 pertained to her being a Thai national.The paper he gave me for reference I don't recognize from the US and Thai Tax treaty.It looks like a poor translation.I will post  a copy of what he gave me.

Perhaps the Thai TRD worker does not understand the difference between a government pension and Social Security.  If you visit the TRD office again, take the SSA-1099 for your wife's benefits to prove that her payments come from US Social Security Administration. 

[jlm53]

Yes I will do that.I had all of that with me but nobody wants to look at it.Their minds are all ready made up.A delicate balance of passive and aggressive behavior on my part.I just don't want to get surprised with a big tax bill.Penaltys and interest.I know she owes no Taxes but I have to convince him of that.

I keep choosing files, to show what he gave me,but I don't know where they are going

[jlm53]

Also he told me I don't need to pay any taxes without looking at my SSA-1099.It's about her being a Thai National.

[mudcat]

These may help 

[mudcat]

As might this

[Presnock]

5 hours ago, jlm53 said:

Went to Udon tax dept. My US Social Security is tax free,but my wife's is not they he said Article 20 has a provision in Artcle 21 paragraph 2 Government service.That part is correct,but nothing in there saying she is not tax free.The paper he gave me isn't even in the US & Thai Tax treaty.Anybody ran into anything like this?

By the way my wife owes over 20,000฿ according to the tax office.

you can easily read, in ENGLISH by googling the DTA between the US and Thailand or look it up under the www.rd.go.th/English and check out the DTA there too but googling is easy and just check article 20 or 21 - it says if a Thai native is also living in thailand their pension is not taxed only by the US but I did think that ss was different than a pension in those articles.  I will let you read them 

and let you make a determination if you need some legal help.  Good luck

[Presnock]

2 hours ago, gamb00ler said:

Perhaps the Thai TRD worker does not understand the difference between a government pension and Social Security.  If you visit the TRD office again, take the SSA-1099 for your wife's benefits to prove that her payments come from US Social Security Administration. 

Also besides reading the STA in English, also google "Is US social security a pension?" and you will see the argument there that there is a difference, they are paid out of different funds and are funded differently.  BY reading and understand the article s here, you might learn enough to argue with the revenue department here.  Otherwise, you might contact the US social security system (if there is any office still taking phone calls and ask them specifically if your wife does not have to pay any Thai taxes on her social security.  From what Ihave just read, Thailand does not have the right to tax her US social security.  Good luck either way as I wouldn't pay it for sure! unless US law has changed since the DTA was written.  If your wife was receiving a pension check from a civil service job then yeah Thailand could tax that pension but you seem to be talking straight social security only!

[RUSirius]

Deleted

[Presnock]

5 hours ago, gamb00ler said:

The thread title refers to you wife's SS benefits but your post is referencing Article 21 which deals with pensions paid to government employees.  If indeed her pension is NOT paid for past employment by a US government agency/department but for other work that is covered by Social Security, it would be covered by Article 20 paragraph 2... not by Article 21.

 

There is no distinction in the US-Thai tax treaty Article 20 depending on citizenship of the SS recipients.

 

If your wife is receiving both a government pension and Social Security, then the portion earned from work covered by a government pension would be taxable in Thailand, but the portion from SS would not.

 

Note: recent US federal law was changed so that former governmental employees are no long penalized by SSA through benefit reduction due to Government Pension Offset (effective Jan. 1, 2024).

 

US-Thai treaty Article 20 paragraph 2:

 

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

Article 21 paragraph 2:

 

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

 

totally agree but you will have to get someone explain it properly to the TRD guy as we have noticed from other Forum people, most don't have a clue about the DTA and by including pensions in Article 20 too, that is what is confusing the revenue dept.  typical lawyers writing style just to confuse the average reader.

[ignore it]

Hmm...

 

The headline probably gave those folks pro a certain out of power political party a 'told you so' chubby.

[khunjeff]

6 hours ago, gamb00ler said:

The thread title refers to you wife's SS benefits but your post is referencing Article 21 which deals with pensions paid to government employees.  If indeed her pension is NOT paid for past employment by a US government agency/department but for other work that is covered by Social Security, it would be covered by Article 20 paragraph 2... not by Article 21.

 

There is no distinction in the US-Thai tax treaty Article 20 depending on citizenship of the SS recipients.

 

If your wife is receiving both a government pension and Social Security, then the portion earned from work covered by a government pension would be taxable in Thailand, but the portion from SS would not.

 

Note: recent US federal law was changed so that former governmental employees are no long penalized by SSA through benefit reduction due to Government Pension Offset (effective Jan. 1, 2024).

 

US-Thai treaty Article 20 paragraph 2:

 

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

Article 21 paragraph 2:

 

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

 

 

This is exactly correct. The person you dealt with at the Revenue Dept is misunderstanding the difference between a Social Security payment and a pension paid for being a former government employee. How (or if) you can get him to admit his error, though, will be the real challenge.

[jlm53]

This is the paper that he washing to determine that she needs to pay taxes.doesn't make any sense to me.She was a Hotel worker not a Professor,Teacher or Researcher.I don't recognize this.

[jlm53]

using

[mudcat]

The TRD person is mistaking Article 20 from the U.S.'s 2006 model instead of Article 17 which Addresses Social Security in much the same terms as Article 20 in the actual Thai-United States tax convention:

 

2006

U.S. Model  Income Tax Convention 
Article 17 
PENSIONS, SOCIAL SECURITY, ANNUITIES, ALIMONY, AND CHILD SUPPORT 
1. a) Pensions and other similar remuneration beneficially owned by a resident of a Contracting State shall be taxable only in that State. 
b) Notwithstanding subparagraph a), the amount of any such pension or 
remuneration arising in a Contracting State that, when received, would be exempt from taxation in that State if the beneficial owner were a resident thereof shall be exempt from 
taxation in the Contracting State of which the beneficial owner is a resident. 
2. Notwithstanding the provisions of paragraph 1, payments made by a Contracting State under provisions of the social security or similar legislation of that State to a resident of the other 
Contracting State or to a citizen of the United States shall be taxable only in the first-mentioned State. 

....

 

[RetiredNavy71]

7 hours ago, jlm53 said:

Yes I will do that.I had all of that with me but nobody wants to look at it.Their minds are all ready made up.A delicate balance of passive and aggressive behavior on my part.I just don't want to get surprised with a big tax bill.Penaltys and interest.I know she owes no Taxes but I have to convince him of that.

I keep choosing files, to show what he gave me,but I don't know where they are going

Well it seems to me that you not only have a problem with the IRS for an unpaid tax bill as well as a problem with the Thai taxing authority.  How can this be? Isn't the law set up to protect you and your family from something like this? If I were you I'd get this resolved as soon as possible and not let this situation get out of hand!

[Guavaman]

6 hours ago, jlm53 said:

This is the paper that he washing to determine that she needs to pay taxes.doesn't make any sense to me.She was a Hotel worker not a Professor,Teacher or Researcher.I don't recognize this.

This is not the DTA with the U.S.  @khunjeff clarified the issue which appears to be a misapplication of Article 21 paragraph 2:

 

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

[JimGant]

On 3/29/2025 at 7:50 AM, jlm53 said:

Went to Udon tax dept. My US Social Security is tax free,but my wife's is not they he said Article 20 has a provision in Artcle 21 paragraph 2 Government service.That part is correct,but nothing in there saying she is not tax free.

In fact, it does say she is tax free, per the technical DTA:

Quote

As a general matter, the result will be the same whether Article 20 or 21 applies, since social security benefits are taxable exclusively by the source country and so are government pensions. The result will differ only when the payment is made to a citizen and resident of the other Contracting State, who is not also a citizen of the paying State. In such a case, social security benefits continue to be taxable at source while government pensions become taxable only in the residence country.

Interesting to note, if wife were also getting a US govt pension, Thailand would, yes, have primary taxation rights, if she were a resident of Thailand, and also a citizen. BUT, if she were a dual US-Thai citizen, her US citizenship would trump her Thai citizenship, so no Thai taxation [who is not also a citizen of the paying State.]

 

Nice to see that some TRD offices are actually referring to the applicable DTA; not so nice that it's the incorrect DTA and/or they're unable to correctly interpret it.

 

I think there's enough evidence in all these tax threads to say: Farang retirees are smart enough about their applicable DTA, and about Por 162 pre-2024 exemptions -- that their self-assessment would be superior to that of their local TRD, in most (all?) cases. So, if your self-assessment shows no taxes owed, why even file a tax return, particularly in person at your local TRD? You'll just end up in an argument with an idiot. So, don't file if taxes aren't owed -- even if your assessable income does exceed those arbitrary 60/120/220k thresholds (which are not enforceable, says Ben Hartman at Integrity Legal -- nor knowable by TRD, in the absence of any Thai equivalent 1099s). Also, probably best to reassess whether or not getting back your 15% withholding on bank interest taxation is worth the potential hassle....