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:
- Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
- Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
- Choose Add (Another) 1099-R
- Choose I'll type it in myself
- Choose the source of your 1099-R form
- Enter your pension income into the Form 1099-R entry screens
- 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.
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