This is really a legal question and unless there are tax attorneys out there I may be barking up the wrong tree. Thinking of visiting my local IRS office on this, to make sure I am doing this correctly.
I know there is a way to report foreign "social security income" by using "dummy 1099R" form, but in that interview process you will be presented with a box that requires plugging the income received and the Federal Taxes withheld. That is not what you should do as the taxes were not withheld by the U.S. but a foreign government. However, TT seems to be OK with using a "dummy" if you report the income this way. That does not mean that you have done it correctly though.
Using Form 1116 seems to be the only way for reporting this sort of income. However, this way does not allow all of the foreign taxes already paid to count towards reduction of the overall Federal taxes paid. Depending on the amount you paid in foreign taxes, a lot of those taxes will be disallowed, carrying forward 10 years, I believe (or, they carry back one year). If you use the "dummy 1099R" method a much larger (perhaps the whole amount) portion of foreign taxes paid will be allowed as a credit and thus, you pay much less in Federal taxes. But, again, I have serious concerns over use of "dummy" vs Form 1116.
Cheers,
JJ
