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For a Brazilian pension, I used a substitute 1099R and deducted the taxes paid in Brazil from the gross amount. Is this all I can do in Turbo Tax or can I use a 1116 frm?

 
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MonikaK1
Employee Tax Expert

For a Brazilian pension, I used a substitute 1099R and deducted the taxes paid in Brazil from the gross amount. Is this all I can do in Turbo Tax or can I use a 1116 frm?

When reporting a foreign pension on your tax return, report the full amount received. Do not deduct taxes paid from the gross income received.

 

Generally, foreign pensions are taxable to US citizens or residents.  However, some foreign pensions might not be taxable if it is covered under any tax treaties between the foreign country and the United States. Seek legal advice if you are not certain whether your pension income is covered by a tax treaty.

  

If your foreign pension is taxable, you will need to create a substitute form 1099-R. It sounds as if you have already done this.

 

Here are the steps:

 

In TurboTax online,

  • Sign in to your account and select Pick up where you left off
  • At the right upper corner, type in 1099r, then Enter
  • Select Jump to 1099r
  • Follow prompts
  • Next screen, Choose your bank or brokerage, select I'll type it in myself
  • Follow prompts.  On the screen "Tell us if any of these uncommon situations apply" 
  • Check the box I need to prepare a substitute 1099-R and follow the prompts.  

 

Complete the Foreign Tax Credit (Form 1116) interview in TurboTax to claim any credit due for foreign taxes paid. You will find the entry screens under Deduction & Credits, Estimates and Other Taxes Paid, Foreign Tax Credit.

 

See this TurboTax article for more information.

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