KarenJ
Intuit Alumni

Retirement tax questions

Your UK pension distribution will be taxable in the US (please see below for some articles that may be of assistance) however, you can claim a foreign tax credit for the tax you paid in the UK to offset double taxation. 

You also will probably have a Form 8938 tax filing requirement to report your specified financial assets.   You can file this form with TurboTax.

https://www.irs.gov/pub/irs-pdf/f8938.pdf

https://www.irs.gov/pub/irs-pdf/i8938.pdf

To report your UK pension income:

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.  

As to the Federal ID, if your foreign issuer does not have the ID number, try entering nine 9s.  If electronic errors occur due to 1099-R data entry, enter the pension under Miscellaneous income, see below instructions.  As long as IRS has the pension reported and included in total income, it is not problematic. 

1.  In the program, from the top, select tab Federal taxes / Wages & Income -Less Common Income ( very last                          section on the screen) 

2.  Select Miscellaneous Income , 1099-A, 1099-C- Start 

3.  Select Miscellaneous Income- Other income not already reported on a Form W-2 or Form 1099-                                        select Start to information

To report the UK tax paid on your pension for foreign tax credit:

  1. Enter foreign tax credit in the search box at the top of the page and click the Jump to link
  2. Click 'Yes" you paid foreign taxes
  3. Click through the screens regarding foreign interest and dividends
  4. Click yes that you have reported all your foreign income already in TurboTax
  5. Click that you want to take a credit
  6. Answer question about the Simplified Limitation Election
  7. Choose income type for pension - it will be General category income
  8. Add UK as the county
  9. Enter description -UK pension
  10. Enter Income amount that you previously reported under UK pension income
  11. Enter your taxes you paid on your UK pension in the box "Other income"
  12. Continue through the foreign tax credit screens until the program says you are Done.


https://www.exfinuk.com/US-taxation-UK-pension-funds

https://www.goldinglawyers.com/u-s-taxation-on-u-k-retirement-pension-irs-offshore-reporting/