Deductions & credits

Multiple discussions in this forum and accurately describing what worked one year does not work any more. To summarize the discussions.

 

1) Create a subsitute  1099R and and attendant form 4582. The problem here is that without an EIN Efile may be rejected. Workarounds like all 11-1111111 are flagged as an error in turbotax and may require manual filing. Manual filing is really a less than satisfactory solution. I have noted all 7ss or 5s might work and I have used 11-1111111 in other years and Efile worked.

 

2) Claim the pension in come as miscellaneous income (interest or other) This is problematic particularly in states that do not tax pension income. The income shows as earned income not Pension Income.

 

I wonder if there might be third option at least for Canadian pension. You could claim the pension under Canadian Registered  Pension Income, which has a specific tax category. My interpretation is that a Registered Pension Plan is treated identically as RRIF or RRSP. 15% Tax is withheld, distributions are taxable as received and US/Canadian Tax treaty applies. So for those who have a foreign Canadian Pension (NOT Canada Pension Plan which is reported as Social Security) this option may work. Not sure if changing the method from other years may raise red flags. 

 

Since this issue has been floating around for years I am not  optimistic about a resolution. There must be millions of people who have foreign pension and sending unecessary manual filings to an overwhelmed IRS does not seem like the answers. Particularly when the IRS 4582 instructions indicate leave TIN or EIN blank if unknown.

 

Note all options require you to file for foreign tax credit.