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October 13, 2019
Question

My husband recieves a pension from abraod and is taxed there...when we put his earnings into the form it taxes us and reduces our refundHelp?

  • October 13, 2019
  • 2 replies
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2 replies

DoninGA
Employee
October 13, 2019

You need to report the Foreign Taxes paid for the pension income.

 

To enter Foreign taxes paid -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Deductions and Credits
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Estimates and Other Taxes Paid
  • On Foreign Taxes, click on the start or update button

Or enter foreign taxes in the Search box located in the upper right of the online program screen. Click on Jump to foreign taxes

July 4, 2022

When I try the steps listed, TUrboTax only addresses Dividends, etc. NOT foreign pensions.  For tax year 2020 (I am amending my earlier return) How do I enter the foreign taxes paid in TUrboTax 2020?

 

The steps given above do seem to work.

 

Thanks,

 

Employee
July 4, 2022
October 13, 2019

foreign taxes on pensions relates to the general category

 

In filing the Form 1116, you will be given the option of classifying the income in a certain category. For instance, if the pension income is due to a distribution, we can apply certain tax principles and the language in the publications to classify the income as general category (column B). Specifically, if we reference the Form 1116 instructions it states that, “General category income is income that is not passive category income or income described in categories c, d, and e, discussed later.” Foreign pension income is not defined in any of these other income categories. Furthermore, if we review the definition of passive income in IRC Section 469, pension income does not fall in the passive income category. 

 

 

IRS instructions say to report foreign pensions on lines  4a and 4b.   this is ok if you got a 1099-R.  however, if no 1099-R you have no  Federal EIN to enter. 99-9999999 doesn't work and you can't leave the  box blank.

you can paper file but not efile.    an alternative is to enter on line 21 of schedule 1

and label as foreign pension