Canadian Forces pension: Tax withheld at source

[rwpiercey]

I have 15% taxes withheld by Canada on my Canadian Forces pension. In past years Turbo Tax treated Canadian Pensions as foreign income. Now it has a separate section for Canadian Pensions. However, for some reason, it no longer shows Canadian pensions, which make up almost half of my gross income, as Foreign income on form 1116. Therefore, it does not consider it as foreign income when it calculates the percentage of income which comes from Canadian sources.  As a result, it excludes virtually all of the tax withheld by Canada from my tax credits. I don't think the tax laws have changed, so obviously something is wrong. 

Am I doing something wrong or is there a way I can fix this.

[DMarkM1]

Edit the "Foreign Tax Credit" topic in the "Deductions and Credits" section.  

Click through to edit or add Canada as the country you paid the taxes to.  Select "General Category."  You'll get to a page titled "Other Income - Canada" there you can enter the "Pension" and the income amount.  

Continue through the interview to enter the foreign taxes you paid as well.  This will enter the foreign income on the form 1116.  

[rwpiercey]

Thank you for the response; I’ve been trying to follow your instructions for several days now without success. Note that I deleted the return completely and started from scratch.

I am not sure what is going on, but I have tried various avenues of reporting income, and nothing works.

I put the Canadian govt pension income in the program section Canadian Pensions (This section is new for this year). When I do and then I go to the “Foreign Tax Credit” topic in the deductions and Credits section it only lists foreign taxes paid on a 1099_DIV, 1099-INT or K-1.  

I do not see a General category anywhere nor can I get to the section Other Income-Canada.  When I am in the section “Where Did you Receive Dividend Income from…” it only allows me to select Canadian Income from Dividends in my US brokerage account. I then tried putting my pension Income in the Misc. income area with the same result. Note that only one of my 1099-DIV s has any foreign tax, and it’s only $0.83 in income. But the program seems hung up on it. The tax withheld by the Canadian Government is far more than that.

I have never had any such problem in the past with Turbo tax. I can therefore only assume that a 2022 tax year change to the Turbo Tax program has resulted in this impasse. I have requested an extension since the filing date is tomorrow. 

If you need more information, or screen shots, let me know.

At present, I am somewhat at a loss as to what to try next. I would very much appreciate assistance with my problem.

[DMarkM1]

1. Edit the "Foreign Tax Credit"
2. Did you pay taxes on foreign income?  Yes
3. Have you already reported your foreign income?  Yes
4. Continue
5. Take the credit
6. Continue
7. Do you want to use the "Simplified Method for AMT"  Read the page and select either "Yes or No" as applicable to your situation.  Either one will still allow the interview to continue.
8. Completing the form 1116  -   Continue
9. Foreign Tax Credit Worksheet - Continue
10. Choose the Income Type  - General Category
11. Add a country - Canada   or Edit Canada if already populated
12. Verify/Select Canada
13. Description - Pension   Income Amount - US dollars
14. Probably no expenses - Continue
15. Foreign Losses - Continue
16. Does your total taxes paid include amounts reported on 1099...."   "No, I have ...wages."
17. Enter the amount paid in US dollars in the Other Income box
18. 12/31/2022 in the date box
19. Done
20. Continue
21. Paid
22. Done and continue through the interview
23. US resident country when asked
24. No, adjustments when asked
25. Yes you are done entering when asked

@rwpiercey