Worldwide income is reported in both the federal and the state returns.
The +/- option to avoid double taxation following the treaty was suggested here by someone at TurboTax and it made sense to me as one transparently reports the income, and still, it does not get double taxed.
As I mentioned, I have not paid taxes in Belgium yet for the pension received back in 2023 (apparently, they are very slow 😀) so I cannot claim paid foreign taxes back in my 2024 US tax return.
I used the +/- option last year for the federal return and it worked just fine, i.e. no queries from IRS.
The only new issue here is for state taxes, where I would be double-taxed unless I use the +/- option.
As a matter of fact, I now realized that my 2023 state return had this foreign income reported without using the +/- option (which I used instead for my federal return) and therefore I double-paid state taxes on this state income.
I am thinking of filing an amended 2023 state tax return to fix this issue.
I think that the treaty clearly says that taxation for foreign assets should occur at the country of origin in order to avoid double taxation.
The question is how to just do that. The +/- option seems to me to be an elegant, transparent and efficient way to achieve just that but I am open to your suggestions.
