Question

Is my pension (retirement/social security money) I received from foreign country (KAZAKHSTAN) taxable (I mean is considered as income and have to declare)

Forum|Forum|4 years ago
March 20, 2022
1 reply
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Hi!

Here is my situation.

In 2015 I moved to the US from KAZAKHSTAN, regarding Kazakhstan laws I can get/receive all my pension (retirement/social security) money only if I became a citizen of another country. In 2021 I became a US citizen and lost Kazakhstan citizenship. The same year I received my retirement money in US dollar equivalent as an international wire transfer from Kazakhstan to the US bank account in the amount of more than $10000 as a lump sum. I paid 10% of taxes in Kazakhstan as income tax. I'm still working in the US, paying my taxes, and did not reach pension age.

Now my questions: should I file that money as income if yes what form to use?

Thanks

P/S: from 2015 I'm using TurboTax!

Yes, all US citizens and resident aliens have to report the worldwide income in their tax returns.

To enter foreign pension you will need to create a substitute form 1099-R.

Sign into your account and select Take me to my return
At the right upper corner, type in 1099r, then Enter
Select Jump to 1099r
On screen, Your 1099-R, answer Yes and select Continue
Next screen, Choose your bank or brokerage, select I'll type it in myself
On the screen Tell Us Which 1099-R You Have, check the box
I need to prepare a substitute 1099-R and follow the prompts.

As to the Federal ID, if your foreign issuer does not have the ID number, try entering nine 9s.

If electronic errors occur due to 1099-R data entry, enter the pension under Miscellaneous income, see below instructions.

Open your tax return

go to Wages and Income

Click on the miscellaneous income

Click on other reportable income

Enter a brief description and amount

Kazakhstan's government withdrew 10% of taxes from that money as income tax.

Do still think that it is a good option to file that money in 1099-R form?

Thanks

You can enter the pension in other miscellaneous income.

You can claim credit for the taxes you paid in Kazakhstan

The foreign tax paid is entered as follows:

Federal Taxes
Deductions & Credits (you may have to select See all Tax Breaks)
Scroll down to Estimates and Other Taxes Paid,
Select Foreign Taxes
Enter the taxes paid in Kazakhstan

Please make sure you report the interest income before claiming credit for foreign taxes paid.