Deductions & credits

You should first make sure that you need to include this foreign  pension in your US income.  Many countries have tax treaty agreements that cover retirement payments.  

For a complete list see https://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z.

As a general rule, the pension/annuity articles of most tax treaties allow the country of residence  to tax the pension or annuity under its domestic laws. If this is true for your country, you would include the pension income in your US return.  However, you may not need to pay foreign taxes on this income.

In some cases, government pensions/annuities or social security payments may be taxable by the government making the payments. There also may be special rules for lump-sum distributions. You need to look at each treaty carefully.

To enter foreign pension in TurboTax online program, you will need to create a substitute form 1099-R. 

Here are the steps:

1.  Sign into your account and select Pick up where I left off or Continue.

2.  Type 1099-R in the search bar and select Jump to 1099-R

4.  On screen, Your 1099-R, answer Yes and select Continue

5.  Next screen, Choose your bank or brokerage, select I'll type it in myself

6.  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 99-9999999.

If electronic errors occur due to 1099-R data entry, enter the pension under Miscellaneous income, see below instructions.  As long as IRS has the pension reported and included in total income, it is not problematic. 

1. In the program, from the left side menu, select tab Federal.
2. Select the Wages & Income tab from the top of the screen and Continue.
3. Scroll down to Less Common Income ( very last  section on the screen) and show more.
4. Select Miscellaneous Income, 1099-A, 1099-C and Start
5. On the next screen, scroll down to Other income not already reported on a Form W-2 or Form 1099 and select Start to enter your foreign pension information

To enter a foreign tax credit on form 1116, go to:

1.  At the right upper corner, in the search box , type in foreign tax credit and Enter 
2. Select Jump to foreign tax credit 
3. Start with screen Foreign Taxes and select Continue  to follow prompts.

Source:LinaJ2018