Retirement tax questions

If you are amending your 2021 tax return for a different reason, I would not change anything except what you are amending it for. 

Unless you feel that you were taxed on this income, and should not have been.

In general. the pension will have to be reported on the US tax return, but the tax treaties can make it complicated. Because in addition to adding it on your 1040 you might have to file form 8833 along with FBAR and FATCA depending on your exact situation. You may want to consult with a Retirement Specialist regarding this.

If it truly is not taxable in the UK, it may not be taxable in the US.  It depends on which it falls under.

Regarding UK bereavement benefits:

Tax-free and taxable state benefits

State benefits that are taxable

The most common benefits that you pay Income Tax on are:

• Bereavement Allowance (previously Widow’s pension)
• Carer’s Allowance
• contribution-based Employment and Support Allowance (ESA)
• Incapacity Benefit (from the 29th week you get it)
• Jobseeker’s Allowance (JSA)
• pensions paid by the Industrial Death Benefit scheme
• the State Pension
• Widowed Parent’s Allowance

Tax-free state benefits

The most common state benefits you do not have to pay Income Tax on are:

• Attendance Allowance
• Bereavement support payment
• Child Benefit (income-based - use the Child Benefit tax calculator to see if you’ll have to pay tax)
• Child Tax Credit
• Disability Living Allowance (DLA)
• free TV licence for over-75s
• Guardian’s Allowance
• Housing Benefit
• Income Support - though you may have to pay tax on Income Support if you’re involved in a strike
• income-related Employment and Support Allowance (ESA)
• Industrial Injuries Benefit
• lump-sum bereavement payments
• Maternity Allowance
• Pension Credit
• Personal Independence Payment (PIP)
• Severe Disablement Allowance
• Universal Credit
• War Widow’s Pension
• Winter Fuel Payments and Christmas Bonus
• Working Tax Credit

If you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits. Please refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for additional information. 

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

Here are the steps:

1.  Sign into your account and select Take me to my return

2.  At the right upper corner, type in 1099r, then Enter

3.  Select Jump to 1099r

4.  On screen, Your 1099-R, answer Yes and select Continue

5.  Next screen, Choose your bank or brokerage, select I'll type it in myself

6.  On the screen Tell Us Which 1099-R You Have, check the box 

     I need to prepare a substitute 1099-R and follow the prompts.  See attached screenshot

To enter a foreign tax credit on form 1116, go to:

1. After sign into your account, select Take me to my return

2.  At the right upper corner, in the search box , type in foreign tax credit and Enter 

3.  Select Jump to foreign tax credit 

4.  Start with screen Foreign Taxes and select Continue  to follow prompts.

If this does not help please feel free to come back to TurboTax Community with additional details or questions or click here for information on Turbo Tax Support.  You can connect with a Live TurboTax Agent and share your screen.