For Social Security recipients, the TaxAct® program will calculate the taxable portion of the Social Security benefits reported on Line 21a of IRS Form 1040 U.S. Individual Income Tax Return based on Worksheet 1 from IRS Publication 915 Social Security and Equivalent Railroad Retirement Benefits, page 7.
If you reside in a country (listed in Publication 915) that has an agreement with the U.S. regarding the non-taxability of Social Security retirement benefits, we would suggest they be treated as other non-taxable income and not reported on the return.
Under applicable tax treaties, residents of these countries are exempt from U.S. tax on their benefits:
Note. This is ONLY applicable if you are a nonresident alien.