How is foreign pension reported with no 1099 form?

Forum|Forum|1 year ago
February 25, 2025
3 replies
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I see suggestions on reporting foreign pension as "Other income". Will the interview process enable me to also report the foreign taxes paid on that income or will I need to claim a foreign tax credit in a different way?

I am using the desktop version of Turbotax Home & Business 2024.

Thank you very much for any recommendations!

TurboTax Home & Biz Windows

ThomasM125

Level 15

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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TexasTea

Level 4

sorry for a late response to this year-old thread but there's an error here that should be corrected: the suggestion above by @ThomasM125 to "Choose Passive income for the type of income" for a foreign pension isn't right. Pensions are General Category income for form 1116.

TexasTea

Level 4

Yes, you are correct. This is General Category income since it isn't mentioned in any of the income category buckets.

[ Edited 02/17/2026 I 12:23pm PST]

@TexasTea

Unfortunately, @DaveF1006 the burden of proof is on the taxpayer to find explicit support for categorizing income as passive, and I challenge you to find that support for pensions anywhere in the IRS publications, or the tax code, or IRS bulletins, private letter rulings, court cases, etc. Unless you can find explicit support for categorizing it as passive, then the income defaults to general category. There are cases where someone might have what they consider to be pension income, but it is actually an annuity contract, and in that case it fits into one of the explicit types of income that can be considered passive. But for the most part, the income that people think about as "pension" does not meet the definition of "annuity contract". Over a period of decades I've had tax returns filed by three different tax professionals who do nothing but international tax for a living, and they have all been unequivocal that foreign pension income falls in the general category. If you have some support for the opposite position please share it.

Alfreddo

Level 2

Hi,

I have the same situation.

I've followed all the appropriate steps but the system never asks me to enter the amount of foreign tax paid in 2024. The only option allowed is revisit tax credit carryovers (2023). It goes in circles. There was however a question on the 1090DIV or INT section asking about foreign taxes, but I assume that this applies only to that catgory of income and, anyway, it would be impossible for me to determine how much applies to that income. I am gong nuts.

Fred

peter-ludemann

Level 2

Each situation where there is income that asks for US/state taxes, there should be an option for reporting foreign taxes. A 1099-R doesn't have a place for foreign taxes paid - and Canadian RRSPs/RRIFs are treated as a 1099-R by TurboTax (surprise: the Canadian gov't deducts taxes). Corporate pensions have tax deductions. Capital gains (Schedule B) have tax deductions. Etc. etc. (CPP/OAS don't have deductions, per the US-Canada Tax Treaty)

It's a nightmare gathering this information and updating the form 1116.

I suppose Intuit has done the math and figure it's not worth supporting the millions residents and citizens who have foreign income. But it should be pretty easy to collect the necessary information (I have 40+ years experience in software development).

(And I suppose it's way to much to ask that you support Canadian NR4 forms, although you do support Canadian RRSPs/RRIFs, which are reported on NR4)