Let's first verify if you qualify for the tax treaty benefit. Please read : According to the US-China tax treaty, pensions paid by the People's Republic of China for services performed for China are exempt from U.S. income tax unless the recipient is both a citizen and a resident of the United States.These exemptions do not apply to income or pensions for services performed in connection with a business carried on by the People's Republic of China or its subdivisions or local authorities. Please also see https://www.irs.gov/pub/irs-pdf/p901.pdf page 28
If you meet the criteria, you would report the foreign pension by creating a substitute Form 1099-R. In TurboTax desktop MAC program, here are the steps:
1. Open your tax file,
2. Across the top, select Federal Taxes/Wages & Income/I'll choose what I work on
3. Scroll down to Retirement Plans & Social Security/IRA,401(k), Pension Plan Withdrawals (1099-R), select Start
4. On screen, Tell Us Which 1099-R You Have, make your selection and check the box I need to prepare a substitute 1099-R and follow the prompts to enter info.
As to the Federal ID, if your foreign institute does not provide an ID number, please try entering nine 9s. If there is an electronic error occurs, remove the above entries and enter the pension under Miscellaneous income. Please see instructions below. Please note that per IRS, as long as the pension is being reported and included in total income, whether entering as a substitute 1099-R or a Miscellaneous entry, it is not problematic.
1. Across the top, select Federal Taxes/Wages & Income/I'll choose what I work on
2. Scroll down to Less Common Income/Miscellaneous Income, 1099-A, 1099-C- Start
3. Next, selectMiscellaneous Income- Other reportable income, select Start to enter info
In order to enter the tax treaty exemption and allow the program to reduce your taxable income, you would enter the exemption amount as a negative figure. Please follow:
1. Across the top, select Federal Taxes/Wages & Income/I'll choose what I work on
2. Scroll down to Less Common Income/Miscellaneous Income, 1099-A, 1099-C- Start
3. Next, selectMiscellaneous Income- Other reportable income, select Start to enter info as a negative amount
