Your
father’s pension may not be taxable in the United States, depending upon who
paid it.
The
Tax Convention with the Republic of India states that a pension paid out of
public funds for service to the government is taxable in the state of
residence, but a private pension and social security payments are taxable only
in India. See below for more information.
https://www.irs.gov/pub/irs-trty/india.pdf
If
his pension is not taxable, stop
here.
If
the pension IS taxable, then you
need to determine if his income exceeds the filing threshold.
Your
dad should have a statement from the entity that paid his pension. If it is in
rupees, you will have to convert the amount to U.S. dollars.
For
tax year 2016, he must file an income tax return if:
·
He was under 65 years
old on January 1, 2017 and his income was over $10,350; or
·
He was over 65 and his
income was more than $11,900.
When
calculating his income, do not include any amounts that are not taxable under
the tax treaty.
If
he is required to file, any tax that was paid to the Republic of India counts
as a credit against any tax he owes in the United States. That amount is
reported on Form 1116.
Assuming
your father is required to file, he should mail his return to the IRS along with a copy of
his pension statement (do not send the original).
