Deductions & credits

yurigul,

I found out the hard way that different country pension have different tax treatments depending sometimes on the treaty between the US and that country. If you're asking about German Pension entries. Maybe this would help - just do more research and double check the procedures below if it makes sense.

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Here’s how to enter a German Social Security pension (gesetzliche Rente) in TurboTax. The U.S. generally taxes German statutory Social Security in the same way as U.S. Social Security, so you’ll enter it in the Social Security (SSA-1099) section, not as a 1099‑R.

Before you start

• Gather your German pension statement (e.g., Rentenbezugsmitteilung/Leistungsmitteilung) showing total benefits and any repayments.
• Convert the total to U.S. dollars. Use either:
• If Germany withheld any tax, note the amount in USD. Because of the U.S.–Germany tax treaty, that tax often isn’t creditable in the U.S.; you may need to seek a refund from Germany instead. If you’re unsure, you can try the Foreign Tax Credit section and see if TurboTax allows it.

Federal return steps

1. Open your return and go to Federal.
2. Wages & Income.
3. Scroll to Retirement Plans and Social Security.
4. Click Start or Revisit next to Social Security (SSA‑1099, RRB‑1099).
5. When asked if you received Social Security benefits, select Yes.
6. Add SSA‑1099.
   • Payer’s name: Enter German Social Security or Deutsche Rentenversicherung.
   • Box 5 (Net benefits): Enter your total German Social Security benefits in USD.
   • Federal income tax withheld: Leave $0 (Germany isn’t U.S. withholding).
   • Medicare premiums: Leave blank/zero (German health insurance is not U.S. Medicare).
   • If you repaid benefits, enter the repayment in the appropriate box.
7. Lump-sum catch-up: If you received a lump sum that includes prior-year benefits, check the box I received a lump-sum Social Security payment and enter the amounts by year. TurboTax will apply the special lump‑sum election to potentially reduce your tax.
8. If filing jointly and your spouse received German or U.S. Social Security, add a separate SSA‑1099 entry for your spouse.
9. Continue. TurboTax will compute the taxable portion (0–85%) based on your overall income.

Foreign tax paid to Germany (only if applicable)

• If German income tax was actually withheld from the pension:
  1. Go to Deductions & Credits.
  2. Find Foreign Tax Credit and start it.
  3. Country: Germany.
  4. Category of income: Generally General category income for pensions.
  5. Enter the foreign taxes paid (USD) and the tax year.
  6. Follow the prompts. TurboTax will determine whether you can claim the credit or need Form 1116.
• Important: Due to the treaty, German tax on German Social Security paid to a U.S. resident often isn’t creditable; the correct remedy can be a refund from Germany. If TurboTax disallows the credit or you’re uncertain, consult a tax professional.

State return steps

1. After finishing Federal, go to State and start your resident state.
2. TurboTax carries your Social Security amounts into the state return automatically and applies your state’s rules:
   • Many states fully exclude Social Security; some allow partial exclusions or phaseouts.
   • If your state asks to confirm Social Security amounts, the software usually fills them in for you.
3. Complete any state-specific questions and finish the state interview.

What not to do

• Don’t enter German statutory Social Security as a 1099‑R or “Other income.” Use the Social Security (SSA‑1099) section.
• Don’t enter German health insurance premiums as Medicare premiums. If you itemize and meet the medical expense threshold, you may include German health insurance under medical expenses instead.

If it’s not German Social Security

• Occupational/company pensions (Betriebsrente) or private annuities (private Rente) are not Social Security. Enter those in the 1099‑R/pension section as a foreign pension (you’ll enter without a U.S. 1099‑R and provide the details manually). These are generally taxed differently from Social Security.

Tips

• Keep your exchange-rate documentation and the German pension statement with your tax records.
• If you also receive U.S. Social Security, enter it as a separate SSA‑1099; TurboTax will combine them.
• If you got a German lump-sum that includes multiple prior years, use TurboTax’s lump-sum Social Security workflow to check for a lower tax result.

That’s it—enter it in the SSA‑1099 area, finish Federal, then let TurboTax carry it to your state return and apply your state’s rules.

Hope that helps. Just do more research to confirm the steps make sense.

Good luck.