AmyC
Expert Alumni

Retirement tax questions

Passive income is earnings from dividends, interest, royalties, rents, annuities, etc., in which the taxpayer is not actively involved.

A pension is not passive income. See Topic No. 425 Passive Activities – Losses and Credits - IRS.

 

Let me provide all the steps necessary to enter a foreign pension and credit for tax paid.

 

To enter your foreign pension in TurboTax online program, you will need to create a substitute form 1099-R.

 

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “1099-R”
  3. Click on “Jump to 1099-R”
  4. Answer "Yes" to "Did you receive any 1099R forms?"
  5. Scroll down and select "I'll type it in myself"
  6. Select "I need to prepare a substitute 1099-R" and follow the prompts

As to the Federal ID, if your foreign issuer does not have the ID number, try entering ones.

 

Since you also paid Foreign Tax on that income, please see the following steps from @TurboTaxKarenJ:

 

 

To report the foreign tax paid on your pension for foreign tax credit:

  1. Enter foreign tax credit in the search box at the top of the page and click the Jump to link
  2. Click 'Yes" you paid foreign taxes
  3. Click through the screens regarding foreign interest and dividends
  4. Click yes that you have reported all your foreign income already in TurboTax
  5. Click that you want to take a credit
  6. Answer question about the Simplified Limitation Election
  7. Choose income type for pension - it will be General category income
  8. Add the name of  your county
  9. Enter description -XXX pension
  10. Enter Pension Income amount that you previously reported in another section of TurboTax (1099-R substitute)
  11. Enter your taxes you paid on your foreign pension in the box "Other income"
  12. Continue through the foreign tax credit screens until done.

 

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