>I'm not sure this is correct.
What are you referring to? What might not be correct? This thread is discussing several things.
> This IRS page says that the payee does NOT have to file form 8833
>if (2) the payee can claim a treaty exemption that reduces
>or modifies the taxation of income from dependent personal services,
> pensions, annuities, social security and other public pensions.
Be careful. That page, Form 8833, and Treasury Regulations § 301.6114-1 -- https://www.law.cornell.edu/cfr/text/26/301.6114-1 -- are not about whether or not you need to REPORT the income. You must always report all worldwide income unless there is an exclusion somewhere in the Internal Revenue Code.
Rather, those authorities are about whether or not, in addition to reporting the income, you must file a form 8833 to disclose/report that you are relying on a tax treaty provision that changes an IRC provision that would otherwise apply. Indeed, there is a disclosure exception in Treas. Reg. § 301.6114-1(c)(1)(iv) that applies to some pension and some other income: “[disclosure is waived for a position t]hat a treaty reduces or modifies the taxation of income derived from dependent personal services, pensions, annuities, social security and other public pensions, or income derived by artistes, athletes, students, trainees or teachers.”)
If you are a U.S. citizen or resident, you must report your foreign pension just as you would a U.S. pension. In TurboTax, I would likely do this by entering a 1099-R from the foreign payor, excluding its non-existent US tax IDs. Then, checking to make sure the income showed up on the correct lines of the 1040.
Then I would probably go through the Foreign Tax Credit/1116 process and report the foreign tax paid. This frequently zeros out the US tax on the foreign income. However, the IRC 904 limitation will apply, so the FTC allowed might not be the full amount of the foreign tax. (It is limited to the ratio of your US tax times your foreign tax divided by your worldwide income). https://www.law.cornell.edu/uscode/text/26/904
The IRC 901 FTC only applies to income sourced "without the US." That is defined in IRC 862 -https://www.law.cornell.edu/uscode/text/26/862 -- compare that with IRC 861 (income from sources within the US).
Frequently, a tax treaty will say that only one country can tax a particular type of income under certain circumstances. If such a provision overrides IRC 861-865 (or any other section) then you must file a form 8833 unless Treas. Reg. § 301.6114-1 (or other authority) provides an exception.
Does that make sense @Jan_RI? If not, please ask away, and if possible, provide authority for any statements, such as the IRS page you cited. Ideally, authority is from the IRC, Treasury Regulations, or court cases. Those are the law. IRS pages, instructions, etc., can be helpful but are not law and can be wrong.
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