I was born in the UK and have been permanently
resident in the US and a US citizen for 20+ years. I now get a UK pension for
the years I worked in the UK as a UK citizen before coming to the US. My
questions are, for taxable income purposes, (a) can I deduct the
contributions I paid into my UK pension from the taxable income of this
pension and (b) can I also deduct the contributions my employer paid into
my UK pension fund from the taxable income of this pension . Both
the above contributions were made while I was in the UK (and a UK citizen).
According to the IRS, your contributions and your employer's contributions to a foreign pension are not part of your cost if the contribution was based on compensation for services performed outside the United States while you were a nonresident alien and not subject to income tax under the laws of the United States or any foreign country (but only if the contribution would have been taxable if paid as cash compensation when the services were performed).
Therefore if the UK pension contribution were made tax free while a UK citizen, then you will not be able to claim any deductions in the US for these UK pension contributions.
Please click this link for more information on IRS - Foreign Pension and Annuity Distributions
If this is a UK governmental pension, you would be able to claim a treat exemption on From 8833 (statement to claim a treaty exemption) which you would attach to your mailed in tax return. You would still include the amount on your return under the social security section but you would also include a negative amount for this UK governmental pension on line 21 and the description should read "Tax exempt under US-UK tax treaty Article 17")
To enter the treaty exemption amount in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "other reportable income" in the search bar then select "jump to other reportable income". TurboTax will guide you in entering this information.
I am US citizen and Receive UK pension and trying to find how the UK and USA treaty helps to reduce taxes on Pension I Receive form UK. I paid into Voluntary UK pension while I was in US and these contributions were made with funds that already have been taxed in US
Previous comments were very helpful but if I add the pension from UK to the social security I receive in US
I am taxes at 85% on Social security the UK pension will also be effected by 85% rate, but if I go to line 21 on form 1040 as mentioned and claim 100% of my pension as (-) now I have calmed total of 115% of my UK pension
Also I noted that on new 1040 form line 21 is for " Refund you want to apply to next year estimated taxes" Is there a different line where we claim the refund of UK pension
Since we need to complete form 8833 does any one have UK treaty codes for form 8833
line 1 b, Line 2, Line 5 and some explanation for line 6
No there is not a place to request your UK Pension, But I did find the US/UK Treaty.
US/UK Treaty . Here is all that I found regarding pensions.
ARTICLE 18 Pensions
(1) Subject to the provisions of paragraph (2) of Article 19 (Government Service), any pension in consideration of past employment and an annuity paid to an individual who is resident of a Contracting State shall be taxed only in that State.
ARTICLE 19 Government Service
(2) (a) Any pension paid by a Contracting State or a political subdivision or a local authority thereof to any individual in respect of services rendered to that State or subdivision or local authority thereof shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the recipient is a national of and a resident of that State