I'm Austrian, I get an Austrian pension and I'm retired

[MuellerA]

I have a Green Card and live in the US since May 2019. As far as I understand, there is a tax treaty between Austria and the US and I should not be taxed on my Austrian pension in the USA. I'm not sure how to fill my foreign social security payments. Do I fill it as regular income and claim tax credits or do I fill it the same as an U.S. social security pension and then claim tax credits?

[SusanY1 · Accepted solution]

This will depend on the type of pension that you are reporting.  If you are claiming public pensions or other income that was not taxed in Austria, you will need to file Form 8833 (Found here: Form 8833) in order to claim the benefits under the United States-Austria tax treaty. 

TurboTax does not support this form, although you can make some manual adjustments and attach the form for paper filed returns.  However, due to the complex nature of the tax treaties you may wish to seek professional assistance, especially if this is the first year in which you have filed the tax return with this form.  

For reference the treaty is here: United States - Austria Tax Treaty .

If you paid tax on the income and wish to report it and claim the tax credit, you will report it as "Other reportable income" in TurboTax and then request the foreign tax credit.  Here are the steps you would take to do that:

1. Login to TurboTax.com or open your tax file in your TurboTax software installed on your computer.
2. Click on Wages & Income or Income & Expenses (depending on your version of the program.)
3. Click on Show more beside Less Common Income (if you do not see this option click on Show all Income.)
4. Click on Start (or Revisit) beside Miscellaneous Income, 1099-A, 1099-C.
5. Click on Start (or Revisit) beside Other reportable income. Enter the income here and a description that makes sense to you (such as my Austrian pension.)

After you have entered the income you will need to enter the data for your foreign tax credit computation.

You will enter this in the foreign tax credit section of TurboTax.  To enter it, follow these steps.

First, enter the foreign income.  In the search box (magnifying glass) type the search term foreign earned income then click on the Jump to link in the search results and follow the prompts. When asked if you would like to try to exclude the income answer No.  

Then to enter the taxes paid follow these steps:

1. Click on Deductions & Credits (either in the center of the program or across the top)
2. Click on Show more beside Estimates and other Taxes Paid
3. Click on Start beside Foreign Taxes.
4. Follow the prompts.  Be sure to enter the same income amount here - here the income amount is just used in the credit computation but does not get entered as income on your actual tax return.
5. Note that your taxes paid on your foreign wages are General Category Income.