How is foreign pension reported with no 1099 form?

[juham2013]

I see suggestions on reporting foreign pension as "Other income".  Will the interview process enable me to also report the foreign taxes paid on that income or will I need to claim a foreign tax credit in a different way?

I am using the desktop version of Turbotax Home & Business 2024.

Thank you very much for any recommendations!

JJ

[ThomasM125]

You need to report pension income as such, it should not be reported as "Other" income. You can do this in TurboTax by entering a substitute Form 1099-R.

To enter a substitute form 1099-R in Turbo Tax Online follow these instructions:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R
4. Choose I'll type it in myself
5. Choose the source of your 1099-R form
6. Enter your pension income into the Form 1099-R entry screens
7. When you come to the screen that says Do any of these situations apply to you? Check the box that says I need to file a substitute 1099-R and follow the instructions

For the foreign tax credit, find Estimates and Other Taxes Paid in the Deductions and Credits section and choose Foreign Taxes. Work through that section and indicate that you want the credit as opposed to a deduction, as it will probably give you the better benefit. Choose the "no" option on the page that says No Other Income or Expenses. Choose Passive income for the type of income. Choose the country you earned the income from and enter a description of the income and the amount earned. Enter the foreign taxes paid when instructed to do so. You probably don't need to enter much else on the rest of the screens but you can enter anything that you think applies to you. You will see your foreign tax credit listed on line 1 of Schedule 3 Additional Credits and Payments.

You will only get a credit to the extent you have taxes on foreign income in the current year. Any unused credit can be carried back one year or forward ten years.

[juham2013]

Hi,

I reported my passive income along with taxes I paid to a foreign country on that income (pension).  However, when I look at the summary of my tax returns (I haven't yet e-filed), I see that a portion of the taxes I paid to a foreign county was disallowed.  Does that mean that the portion that was not allowed carries over to tax year 2025?

Look forward to comments on the aboe!

Thank you!

JJ

[juham2013]

Also, TT wants me to provide a Federal ID number of the payer,  but they don't have any such number as it is a foreign payer.  What should I put in the field?

[DaveF1006]

You can put in 99-0999999 as this has been successful.

@juham2013 

[Alfreddo]

Hi,

I have the same situation.

I've followed all the appropriate steps but the system never asks me to enter the amount of foreign tax paid in 2024. The only option allowed is revisit tax credit carryovers (2023). It goes in circles. There was however a question on the 1090DIV or INT section asking about foreign taxes, but I assume that this applies only to that catgory of income and, anyway, it would be impossible for me to determine how much applies to that income. I am gong nuts.

Fred

[juham2013]

Hi "ThomasM125",

In another post I wanted to learn how to report income from a foreign pension.  Again, this has nothing to do with a 401(k) or IRA as no portion of my salary was invested on the stock exchange in my country of origin (I am still citizen of that country).   This income is really very similar to "social security" here in the U.S.  Also, according to the bi-lateral tax agreement between the 2 countries stipulates that the IRS can't tax this accrued income that is based on my employment history.  Of course, that does not mean that I can just skip reporting said income, I will need to report it.

The problem isn't necessarily how to report the income, BUT it appears impossible to claim a tax credit on a modest pension ("foreign social security")!   A foreign tax credit can only be claimed against foreign income, but I can't report this foreign income as foreign income as I would have to dream up a fake/bogus 1099R.   That is why, the so-called "substitute 1099R" won't make any sense whatsoever.  This foreign entity does not issue a 1099R form.

TT can't handle my tax situation although there must be thousands of others who are faced with this same dilemma.

JJ

[juham2013]

I am using Desktop version of TT Home & Biz incidentally so the interview process is likely different