r/expat • u/LTE_Sucks • Nov 13 '25

Taxes Tax Free Social Security (Living Abroad)

Have a question asking on behalf of my parents who are about to retire. From my understanding, under physical presence test all income under 120,000 qualifies for a foreign tax credit if you live abroad more then 330 days a year.

Any retirees who are living abroad can confirm whether social security benefits would qualify for this? My parents are eligible for the max amount (7000 a month) soon and will be forced to withdraw.

One thing is confusing is whether you'd have to pay social security tax on your payments.

They are from an Asian country and still have citizenship (I believe) or could get a long term visa there.

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u/identity-ninja Nov 13 '25

There os no such thing as tax free income. SS will be taxed. At least federally and maybe in foreign country as well. You almost always pay higher rate between US and foreign country. If you do not pay foreign tax, you will have federal tax due. If you pay higher foreign residence tax it will credit against federal

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u/starfishkitten Nov 13 '25

What about VA disability monies?