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(Paying Taxes in U.S & Ireland)

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richard0412
7/20/2017 06:49 EST

I currently have Irish and US citizenship; my wife only has US citizenship. We are considering moving to Ireland permanently. I have a question concerning taxable income. Would we be responsible for taxes in the US and Ireland? We are both retired and will not be working in Ireland. Our income is a pension, social security and annuities. Concerning social security benefits. If you live permanently outside of the US do would you lose that benefit?

Any help would be appreciated.

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bearcountry
7/20/2017 07:56 EST

You will still get benefits from SS while living outside the US. We live in Costa Rica, have our SS deposited in a US account, and retrieve funds from ATMs. With CapitalOne there are no foreign transaction fees. We still have to file taxes in the US and depending upon your state and situation may also have to file with it. Someone else will have to respond about paying taxes in Ireland.

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Pbrennan
7/20/2017 16:26 EST

Hello,

We are in a similar situation, and I have researched this subject. IRS Puplication 54 is a relevant resourcee. The States and Ireland have an agreement addressing this, which provides the appropriate guidance.

The below links should be useful.

US Embassy Ireland info:
https://ie.usembassy.gov/u-s-citizen-services/internal-revenue-service-u-s-taxes/irs-tax-information/

Technical summary of the "Convention" (agreement):
https://www.irs.gov/pub/irs-trty/iretech.pdf

From the SSA:
https://www.ssa.gov/pubs/EN-05-10137.pdf

Of course, you will need to research for your own situation.

Good luck!

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dave8408e
7/20/2017 18:31 EST

Ireland has an agreement on taxation with the US; you'll pay income tax in the US, or Ireland, but not both. Receiving your Social Security payments in Ireland is simple to arrange and not an issue; there's tens of thousands of American retirees receiving their SS money all over the world.

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richard0412
7/21/2017 00:00 EST

Thank you for the information.

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richard0412
7/21/2017 00:08 EST

Thank you! I will look into what you sent. I appreciate your help.

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KevinfromKinsaleviaNYC
7/22/2017 07:55 EST

These tax treaty and related documents are unfortunately beyond my ability to fully interpret and I have not yet found a tax professional who is fully versed in the subject..

Dave or anyone else, is the paragraph below an accurate description of the tax treatment of US social security of full-time Irish residents?

If you are defined as an Irish resident for tax purposes, Ireland will want to tax all of your income including US social security. Therefore, you must file an Irish tax return and determine your tax liability. Based on the tax treaty, however, any U.S. income tax paid on this income will be treated as a credit against Irish tax. If no US income tax is paid on this income, you must pay the total tax liability based on Irish tax rates.

My estimate of my Irish tax liability shows that I will pay more taxes as an Irish tax resident than as an American tax resident.

I have heard the opposite from some people who have stated that the tax treaty allows you to pay taxes only in Ireland. But I think the reason is simply that the effective tax rates in Ireland are higher than the effective tax rates in the States. So it seems that all Irish tax residents are liable to pay at least some Irish tax.

Does anyone have a different understanding?

Also, if my social security income is direct deposited to an Irish bank, will this information become known to the Irish revenue authorities?

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Meachair54
7/22/2017 12:50 EST

Hello , Kevinfromkinsalevianyc ,
If you look up The U.S. Tax Convention with Ireland under Article 18 you will find the answer to your question.
On the second question of direct deposit of social security check to an Irish bank it will show up as a deposit from the U.S.Govt. , plus the fact of it showing up at the beginning of each month is another sign that you are receiving a S.S. Check from the U.S. , but that is also explained under Article 18 . Hope that helps to answer your questions. Good Luck !!!!

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KevinfromKinsaleviaNYC
7/22/2017 13:40 EST

Thanks, Meachair but you immediately referred me back to the same documents I said I am having problems understanding. I have read Article 18 (and 19) more times than I would like to admit and still do not feel I have the answer I seek. I am sure it is my ignorance of such technical language.

Can someone simply read my summary paragraph and tell me whether the statement is correct or incorrect and if incorrect, why?

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Meachair54
7/22/2017 22:02 EST

Kevinfromkinsalevianyc ,what you first ask about where and how much taxes you will pay on Social Security check ; you will pay the tax to the U.S. Gov't . The other part about tax credits and where you will pay more if you're a resident of Ireland is a different subject altogether ,which refers to people working and paying into the U.S. Or Irish Social Security scheme or both is about where or how much credits you will get toward one or the other Soc. Sec schemes that determines how much a person will receive when eligible for Soc. Sec. In either country . You being a retired U.S. citizen residing in Ireland wouldn't be allowed to work and this wouldn't be a concern for you .

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Joshuak
7/24/2017 07:32 EST

He writes he has Irish citizenship (Dual) so both he and his wife could work once they establish residency. A Irish citizen with proof via passport is almost the same as a natural born Irish citizen and his wife would be given a residency card with a #4 on it which does allow them to work. But maybe they do not want to work. After getting a residence, they both can obtain a Public Service Card and PPS number with perks, and after filling out the application also get free TV license and a monthly allowance on their electric bill. In addition, they qualify for a European Union travel medical card good in all EU countries. They would not qualify for social services payments unless they had employment or Irish income that was taxed in the past. Look at "Citizens Information.ie".

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Joshuak
7/24/2017 09:03 EST

Bearcountry has the best way to handle US income in Ireland or other countries. When you have your Social Security check sent direct to a foreign bank, they deduct a foreign transaction fee from that money and you do not always get the best exchange rate. If you do as he did and have SS check deposited in a US bank such as Capital One 360, USAA Bank, or Ally Bank, you can pull your money from local ATMs in Ireland in Euros and get the best exchange rate and no transaction fees. I used to go to my local AIB bank and use their ATM outside on the wall of their building, then go inside and deposit in my Irish bank account. But if you feel that is too inconvenient, then pay the 3 - 5% more to have it sent direct to the Irish Bank.

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Muddled
7/24/2017 13:06 EST

Citizenship alone will not be adequate for the benefits referred to
http://www.welfare.ie/en/Pages/780_Free-Travel.aspx

The EHIC is only available to residents in Ireland if they are on some sort of social welfare or when the appliant(s) can show they have been contributing to the tax system. You do need a PPSN as well.

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Muddled
7/24/2017 13:09 EST

Sorry, wrong thread!

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Muddled
7/24/2017 13:09 EST

Sorry, wrong thread!

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Muddled
7/24/2017 13:09 EST

Sorry, wrong thread!

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lovelyrita
7/24/2017 16:46 EST

This website has some interesting discussion of the topic: https://www.americansabroad.org/taxation-of-social-security-benefits/

Overall, I think you're right though. If you are resident in Ireland you have to pay taxes on income which includes Social Security income. But as a citizen you'll also be eligible for the different deductions that may apply to your personal situation.

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justdrea
1/10/2018 00:08 EST

this is very helpful. thank you

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DebAckley
1/10/2018 07:24 EST

Hi! I believe IE/USA have a deal that you pay taxes in one place or the other. We retired and tried to move over ( I have dual, my husband not). We couldn't get a mortgage as they would not consider our pensions, SS, etc as social security. We only wanted a small one...so we came back to NY. You will need to look into health insurance over there also. We loved IE, but missed family also. Going back this spring. Wishing you the best!

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Muddled
1/10/2018 08:38 EST

If you look up "FATCA" you will see that depending on your circumstances you may still need to pay U.S. (and possible state) taxes (or some porton thereof). You still have ti file a tax return annually with the IRS. Bone of contention with many ex-pats.

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Muddled
1/10/2018 08:42 EST

https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad

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gregoryNYC
4/27/2018 10:13 EST

Thank you,
you say "citizen with an irish Passport ALMOST the same as natural born" ....so are there caveats? what is the difference?
i assumed the same

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Joshuak
4/27/2018 11:50 EST

You cannot get a Irish pension and medical as you did not pay into the tax system when one works. Give an example: In the US, one has to work 40 quarters in order to qualify for Social Security. There are rules in Ireland and after a certain amount of time one may be able to get medical if they can show they are poor. But you are then at the mercy of waiting lines. The other important thing you need to remember. Although the Irish people are friendly and kind, as soon as you open your mouth to speak, they know you are not "One of them". Maybe it does not make a difference but maybe it does. I know you cannot just walk in and expect to be treated as the same as Native residents.

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dbarnwell
4/28/2018 12:39 EST

iterator
I believe that phrasing was wrong. I can think of no situation in which natural-born Irish are treated differently to naturalized.

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dbarnwell
4/28/2018 12:41 EST

Joshuak:

You said retirees in Ireland " get free TV license and a monthly allowance on their electric bill"..

Unless you are very poor, that only applies to over 70s. And I don't know if it applies only to those on Irish Social Security, I think it is restricted.

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Muddled
4/28/2018 12:49 EST

If you are a U.S. citizen living and working abroad you may still be liable to U.S. taxes (depending on your earnings). Google "citizen-based taxation.

https://americansoverseas.org/en/americans-overseas-citizen-based-taxation-cbt/

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Muddled
4/28/2018 12:50 EST

I don't think this a question for the Ireland forum.

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Muddled
4/28/2018 12:53 EST

You have to pay into an EU countries tax system to be eligible for an EHIC - citizenship alone doesn't make one eligible.

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Joshuak
4/28/2018 14:57 EST

I think the number is 66, but some things may be for over 70. But yes, it applies to retirees over a certain age. Point here is citizenship by ancestry does not give many things unless a person worked and paid into tax system. I do not know extent or amount of time required. I was over 70 so I did get some perks when I lived there for a bit over a year. All because I wanted a TV license. I tried to pay for it but the form was required which gave a host of perks for free.
Therefore you will not be the exact same as native born Irish that work there. The worst thing I could see was the non acceptance of US driver's license if one expected to remain over a year. To get a Irish Junior license is expensive and insurance may not want to cover you. They recognize all other EU countries for direct reciprocal licenses and I think now Canada. Problem may be tied to Driver's licenses in the US are done by the State, and Ireland would have to get agreement with 50 different agencies. These are some of the reasons citizens by ancestry are not quite the same as Native Irish.

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Keamore
4/29/2018 04:53 EST

Lot of misinformation in this thread about the Irish pension system, particularly the non-contributory pension.

There is no caveat or restriction due to country of birth if you are a legal citizen of Ireland. That's ridiculously untrue.

You have to meet several requirements such as age and habitual residency in order to quality but the non-contributory pension is means tested ONLY.

https://www.ifa.ie/wp-content/uploads/2016/09/Your-guide-to-non-contributory-state-pension.pdf

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Mellis5910
4/29/2018 04:55 EST

http://www.citizensinformation.ie/en/moving_country/moving_to_ireland/coming_to_live_in_ireland/irish_citizens_coming_or_returning_to_ireland.html

'If you are an Irish citizen living outside Ireland and you are planning to live in Ireland, this document is an overview of what is involved in moving here. You may be an Irish citizen born outside Ireland who is coming to live in Ireland for the first time, or you may be returning to Ireland after living and working abroad for a number of years. In both situations the information about your rights and entitlements is the same. For older Irish citizens there is more information in our document, Retiring to Ireland.'

As this states, all Irish citizens, whether born in Ireland or not, are eligible for the same social services...including the Noncontributory Pension, and medical card services.

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Keamore
4/29/2018 05:53 EST

Here is a link to more complete information regarding the Non-contributory pensions...including telephone numbers.

https://www.welfare.ie/en/Pages/State-Pension-Non-Contributory.aspx

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Muddled
4/29/2018 08:13 EST

While that info is helpul Keamore, it is from the Irish Farming Association. Here is a link re eligibility for non-contributory penison from Department of Social Protection (also keep in mind there is a bilateral social security agreement between U.S. and Ireland, so it would be one pension OR the other:
http://www.welfare.ie/en/Pages/State-Pension-Non-Contributory---Frequently-Asked-Question.aspx

though I think this may be off-topic from what the thread-starter was asking.

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Muddled
4/29/2018 08:13 EST

While that info is helpul Keamore, it is from the Irish Farming Association. Here is a link re eligibility for non-contributory penison from Department of Social Protection (also keep in mind there is a bilateral social security agreement between U.S. and Ireland, so it would be one pension OR the other:
http://www.welfare.ie/en/Pages/State-Pension-Non-Contributory---Frequently-Asked-Question.aspx

though I think this may be off-topic from what the thread-starter was asking.

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Keamore
4/29/2018 18:36 EST

I draw your attention to question #9 and the unqualified answer of "Yes!"

http://www.welfare.ie/en/Pages/Can-I-qualify-for-a-payment-from-both-countries.aspx

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honda00
5/9/2018 21:59 EST

@joshuak - I'm an American who has been living in Ireland for 18 years. I have NEVER every experienced this 'not "One of them"' issue you are spreading doubt over. Please, only spread information if you have a reason to believe it is reliable.

In all situations - social, professional, government, health, etc. - in all of my 18 years here - I've always been treated the same, if not better, than an Irish citizen. Yep, that's right. I'm not even a citizen.

Get your facts right.

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Joshuak
5/10/2018 11:47 EST

Hondaoo, maybe you never noticed. I have directly asked friends and relatives there about EU citizens and Americans that either moved or are long term visitors. I got a variety of answers. Some of which said" do they still have that citizenship by ancestry in our laws" OR "we should not allow outsiders to come here and take advantage of our social programs meant for Native Irish". One of the irritants now has to do more about poor EU people moving in and taking advantage of free healthcare and now local Native Irish have long waits for their appointments or hospital tests. I have heard that complaint many times. You may not see this in every community, but there are cities and towns where there are pockets of "Foreigners" that have not assimilated well and have not done well financially so they and their children become dependent on the Government for certain programs. Therefore as soon as you start talking they know you are not one of them, no matter where you come from. However, many Irish recognize that the US is their "second Home", so to speak, and will treat you as well or better than their Irish Neighbors. I am just telling you like it is. I have spent many trips there and I lived there for about 18 months in both Enniscorthy and in Cork City where my Mother was born and raised. I still have cousins farming near Bantry. They have their thoughts on the matter too. Don't be surprised if there is a move on to remove Ireland from the EU as the Native Irish are not so happy with other Europeans moving in as if they own the place. To some, Americans are no different than other outsiders, even if they have citizenship by Ancestry. Try getting a reciprocal Drivers license if you are from the US ? You are told to go to school again and act like you don't know anything about driving, Yet some drunk from Latvia gets one. Don't tell me I don't have the facts.

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Keamore
5/10/2018 12:25 EST

Origin stories and personal, subjective experiences might be interesting to some, but that's all they are...personal, subjective experiences.

I've seen a considerable bit of misinformation posted here...and, I suspect, some deliberate DISinformation too, as if certain people are furthering an agenda.

At any rate, I'm a dual citizen and after numerous visits over the years I moved to Ireland permanently over a year ago. I have no plans to return to the US.

Other than the usual bumps you encounter when dealing with any bureaucracy, I've had few problems getting set up. House, utilities, PPS number, Health Card, driver's license, car purchase, insurance for same--check, check, check, check, check, check and check.

I'm treated like any other Irish citizen, perhaps with a bit more friendly interest because of the novelty value of being an ex-pat American in rural Ireland.

I suggest that when complex matters such as taxes, social services, and medical are raised, we should simply post links to the appropriate Irish government agencies instead of pontificating about our individual perceptions, experiences or (mis)interpretations of Irish law and policy.

Subjective opinions are not as valid and definitely not as helpful as objective fact.

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dave8408e
5/10/2018 13:42 EST

Looks like the Irish are happy to stay in the EU. Here's an article from the Times: https://www.irishtimes.com/news/politics/more-than-90-of-irish-people-want-to-stay-in-eu-poll-reveals-1.3488112

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Muddled
5/10/2018 14:03 EST

Just want to clarify there is very little interest in Ireland to leave the EU

http://www.thejournal.ie/ireland-leave-eu-poll-february-2018-3836085-Feb2018/

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Muddled
5/10/2018 14:10 EST

@HondaOO - consider yourself very lucky! Perhaps you live in the Dublin area where foreigners are more the norm.
I was here more than 15 years before people stopped treating me but I live in a small town and a rural area, so it could be the "small town mentality", more so.

Many times my country of origin was mocked as a form of "banter". We all have had our own unique experiences.

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