You can
enter the foreign pension income on Form 1040, Line 21 as "other
income" or "foreign pension." You won't need a Payer ID, state or zip code
with this approach.
The IRS wants the pension reported as income - unless the pension receives special tax treatment, it is
perfectly OK to report it as Miscellaneous Income.
To make entries on Line 21, go to the Other Reportable Income interview, the
very last interview in Wages and
Income (Federal Taxes tab > Wages & Income category
> Less Common Income subcategory > Miscellaneous
Income sub-subcategory).
In TurboTax Online, enter "other
reportable income" in the Search Box and then select "Jump to Other Reportable Income".
If you choose this way, then you won't have to create a
substitute Form1099-R, by filing Form 4852 and you won't encounter e-file
errors over the Payer ID. However, the end tax result (in terms of United
States tax rate and amount assessed) will be identical under both methods.
Your other option is
to prepare a Substitute Form 1099-R and a Form 4852 to report that foreign
pension on your tax return.
In the Retirement Income interview for Pension Plans (Form
1099-R), check "I need to prepare a substitute
Form 1099-R" and follow the instructions in the interview.
(When asked for amounts, convert the Euros into $ US. See Currency Conversion)
Did your wife pay tax to the Netherlands? The tax paid on the pension is entered in the Foreign Taxes
section of Estimates and Other Taxes Paid. You can go directly to that section
in Turbo Tax by clicking on Federal
Taxes (on the top menu bar) and then Deductions and Credits. When the page opens, scroll
down to see the list of all items (or Jump to Full List, if it's not
displayed). Select the Estimates
and Other Taxes Paid section, then Foreign Taxes Paid.
