Netherlands article 19, #4states: Subject to the provisions of paragraph 2 of Article 20 (Government Service), pensions and other payments made under the provisions of a public social security system and other public pensions paid by one of the States to a resident of the other State or a citizen of the United States shall be taxable only in the first-mentioned State.
If this is what applies to you, then you need to report the income with the substitute 1099-R and then subtract the income back off the return. To do that:
- go to the income section,
- scroll to the bottom option, Miscellaneous Income.
- select,
- scroll to the bottom again, Other Reportable Income,
- select.
- Enter the income as a negative and the description as Netherlands treaty.
Then, no need to enter foreign tax paid at all.
If this is not your situation, enter the income and enter the foreign tax paid. Where do I enter the foreign tax credit (Form 1116) or deduction? Note, you can try both options. The credit is most commonly used.
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