Deductions & credits

Yes, your UK pension is subject to tax in the US.  If you pay foreign taxes on your pension you can claim a Foreign Tax Credit using Form 1116 when you file your return.

Article 18 of the UNITED STATES-UNITED KINGDOM INCOME TAX CONVENTION states:  "...any pension in consideration of past employment and an annuity paid to an individual who is resident of a Contracting State shall be taxed only in that State [the UK]..",s, Foreign Pension income is taxable in the US.

To report the foreign pension income,  Click on Wages & Income,

1. Scroll all the way down to Less Common Income then to Miscellaneous Income Form 1099-A
2. On the next screen, scroll all the way down to Other Reportable Income; choose Start/Update. 
3. On the next page, you enter a Description and Amount 

To claim the Foreign Tax Credit see the steps below:

1. Click Federal >Deductions and Credits at the top of the screen
2. Scroll down to Estimates and Other Taxes Paid and click on Show More
3. Click on Start or Revisit next to Foreign Taxes and then select Yes
4. Select Yes to the question "Have you already reported all of your foreign income?" and then click on Continue
5. Select any applicable boxes to the question "Tell Us About Your Foreign Taxes" and then select Continue
6. Then select "Take a Credit" to the question "Do You Want the Deduction or the Credit?" Select No to the question "Do all of the following apply to your foreign income?"
7. Continue until you get to the section "Choose the Income Type" and then select the appropriate income category. Click Continue.
8. Add the country and continue through the sections, answering any applicable questions. Keep going until you get to the section "Foreign Taxes Paid" and then enter your foreign taxes and the date. 

If you believe your UK pension is exempt, you can exclude your UK pension from taxable income. You will have to prepare and include Form 8833 in your return. However, this form is not available in TurboTax.  Therefore, you will need to download the form from the IRS website, complete the form, and include it with your return which you will need to mail to the IRS.  

You can find the instruction for this Form on IRS.Gov

About Form 8833