US Social Security and US pensions if you live in Spain: where they are taxed

US Social Security: Spain taxes it and credits the US tax actually paid

Social Security benefits paid by the United States to a resident of Spain, or to a US citizen, may be taxed in the United States (article 20.1.b of the Spain–United States double taxation convention). That does not take them out of Spanish tax: as a resident of Spain you include them in your Spanish income tax return, and Spain deducts the US tax actually paid on them, up to the part of the Spanish tax that corresponds to that income (article 24.1.a of the convention and article 80 of the Spanish Personal Income Tax Act). The Directorate General of Taxes (DGT) has said so in binding rulings V2308-05, V1841-13, V1535-14 and V0249-20, and in V1535-14 it added that they are taxed as employment income, for their gross amount. The Spanish Tax Agency explains the credit in its leaflet on income from the United States. It only covers US tax charged on grounds other than citizenship.

A disability benefit is a separate case. In the DGT’s criterion, a foreign disability pension is exempt in Spain only if the degree of disability can be equated with Spanish permanent absolute disability or severe disability and the body that pays it is, under its own country’s rules, a substitute for Social Security (article 7.f of the Act, as applied in V0249-20). That ruling quotes the Supreme Court (judgment 346/2019): a 100% invalidity rating in Switzerland was not enough by itself to equate it with Spanish permanent absolute disability, and that assessment belongs to the Spanish Social Security Institute (INSS).

Pensions from past private employment: taxed only in Spain

Pensions and other similar remuneration received by a resident of Spain, as beneficial owner, in consideration of past employment may be taxed only in Spain (article 20.1.a). The DGT applied this rule to payments from a US pension plan linked to the employee’s work and treated them as employment income in the Spanish return; the specific rules of the Act for Spanish pension plans and for plans under the EU occupational pensions directive (article 17.2.a.3.ª and transitional provision twelve) do not apply to such a US plan (V0251-25). Annuities, which the treaty defines as a stated sum paid periodically at stated times during a specified period of time, under an obligation to make the payments in return for adequate and full consideration (other than services rendered), are also taxed only in Spain (article 20.2).

With an Individual Retirement Account (IRA), what matters is where the money comes from. When a pension paid by a private entity does not derive from past employment, the DGT applies the “other income” article of the treaty, which gives the exclusive right to tax to the country of residence, Spain (article 23, as quoted in V0249-20). In V1133-17, on the few facts given (two IRAs held by a US resident who was thinking of returning to Spain), the DGT said that article would apply, because the accounts did not appear to derive from past employment. In V1291-22, amounts from an IRA that appeared to be linked to the taxpayer’s employment as a US government employee, to the extent that they corresponded to services rendered to the United States, followed the government pension rule and were taxable only in the United States, while withdrawals from a Roth IRA were treated as investment income similar to life insurance (article 25.3.a of the Act), taxable only in Spain as the country of residence.

Moving a 401(k) or an IRA: what Spain taxes and what it does not

When you are a member or beneficiary of a US pension fund, its income is taxed as yours only when, and to the extent that, it is paid to you or for your benefit, and not when it is transferred to another pension fund in the United States (article 20.5, added by the Protocol of 14 January 2013, in force since 27 November 2019). The Memorandum of Understanding to that Protocol, as quoted by the DGT in V0251-25, lists among US pension funds 401(a) plans, including 401(k) plans, 403(a) and 403(b) plans, IRAs, Roth IRAs and SIMPLE retirement accounts. So a direct transfer from one of them to another, such as an IRA, with nothing paid to you, is not taxed in Spain, provided both fit the treaty definition of pension fund (article 3.1.j and V0251-25).

If the transfer is not direct, or the money is moved to a pension fund outside the United States, Spain taxes it as employment income (V0251-25, on a US employer pension plan). Moving a US plan into a Spanish pension plan is therefore taxed in Spain.

Pensions for US government service

Pensions paid by the United States, a state or a local authority, directly or out of funds they created, for services rendered to them, are taxable only in the United States, unless you are a resident and a national of Spain, in which case they are taxable only in Spain (article 21.2). The DGT said that, if the person was resident and national of Spain, as her letter appeared to show, a pension from the State of New Jersey could be taxed only in Spain (V5075-16). Pensions for services rendered in connection with an industrial or commercial activity carried on by the State are governed by the ordinary articles of the treaty, including article 20 (article 21.3). In V0249-20, on a disability benefit from the Department of Veterans Affairs, the DGT said that if it were a pension for services to the State within article 21.2 it could be taxed only in the United States, unless the person is a resident and national of Spain; it did not decide which case applied.

When a government pension is taxed only in the United States, Spain does not tax it, but, according to the Spanish Tax Agency, it is taken into account to calculate the tax on your other income if you have to file a return for that other income (exemption with progression, which article 24.1.c of the convention allows). Not every pension from a public employer falls under this rule: in V2449-24 the DGT gave Spain the exclusive right to tax a pension from the Optional Retirement Program of a public university in Texas under article 20.1.a, because the university is not the State, a political subdivision or a local authority within the meaning of article 21.

If you are a US citizen

The treaty lets the United States tax its citizens as if the treaty had not entered into force, with the exceptions listed in article 1.4 (article 1.3). Spain still taxes your worldwide income as a resident. Where the United States taxes a pension only because you are a citizen, for example a private pension that the treaty assigns to Spain, Spain gives no credit for that tax; it falls to the United States to relieve the double taxation, within the limits of its own law (article 24, paragraphs 2 and 3; DGT V1535-14 and V2449-24; Spanish Tax Agency leaflet). Social Security is different, because the treaty lets the United States tax it on grounds other than citizenship, and there Spain does give the credit (V2449-24).

How it is declared in Spain

Pensions from public social security schemes are employment income (article 17.2.a of the Act), and so, in the DGT’s criterion, are payments from private pension schemes linked to employment (V0251-25). Under the law in force on 7 November 2026, a return is required when your gross employment income exceeds 15,876 euros a year and the payer is not required to withhold Spanish income tax (article 96.3.c of the Act). The Spanish Tax Agency leaflet gives as an example the payer of a pension earned from work at a US company, which is not required to withhold. Other income can require a return below that figure, income exempt in Spain does not count towards it, and article 96.4 requires a return from anyone entitled to the international double taxation deduction, under the conditions set by regulation.

What we do

We check whether you are resident in Spain in the relevant year, which US income you receive, who pays it and on what basis, and how the treaty and the Spanish Act treat each item. We prepare your Spanish return, apply the credit for US tax on Social Security and check whether your US accounts must be reported on the Spanish Modelo 720 (assets abroad). If you arrive this year, we look at it together with your tax residence in the year you move. Your US federal return is a separate filing under US rules.

Official sources

Checked on 7 November 2026 in the BOE: the Spain–United States tax treaty (consolidated text last updated on 23 October 2019, with the Protocol of 14 January 2013 in force since 27 November 2019), articles 1.3, 1.4, 3.1.j, 20, 21 and 24, and the Spanish Personal Income Tax Act (last updated on 7 October 2026), articles 17.2.a, 80 and 96. Article 23 of the treaty, articles 7.f and 25.3.a of the Act and the Memorandum of Understanding are cited as quoted in the rulings.

Binding rulings in the DGT database (updated to 30 September 2026): V2308-05, V1841-13, V1535-14, V5075-16, V1133-17, V0249-20, V1291-22, V2449-24 and V0251-25. Spanish Tax Agency: Spanish tax residents with income from the United States. Consulted on 7 November 2026.