Yes but the state will determine how to enter. US Citizens and resident aliens are required to report worldwide income. You will enter the income but is it taxable and should it be subtracted back out is the next question.
See IRS - Foreign Pension and Annuity Distributions and Mexico- US treaty to determine your taxability.
My gut tells me it probably isn't taxable to the federal government. Each state has their own rules so it may be taxable to your state.
Subtraction process if not federally taxable:
1. Miscellaneous Income, 1099-A, 1099-C, Start
2. Scroll to the bottom
3. Other reportable income, Start
4. Other taxable income?
5. Select YES
6. Description
7. Amount, enter your negative amount
8. continue
If you reply with your state, we can determine the next step.
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