Thank you for your reply.
To further clarify, I have added the foreign pension in the federal return and then added an extra line with the exact same amount but with a - sign beforehand. This is what it was suggested, and it worked fine as this way it shows zero balance and hence not computed as income.
In the state return only the 'positive' line item automatically populates straight from the federal return; only I did was to add a 'negative' line item for the same amount quoting the US treaty; as a result, the foreign pension doesn't show as income in my state tax return.
Basically, same approach for both the federal and the state returns.
Hope it clarifies.
