The current recommendation is to enter my NR4 (income code 39) as SSA-1099 but 10 years ago Turbo Tax Pro advised to use 1099-R. Can you confirm which should be used since I don't think that the tax treatment has changed.
Current recommendation https://ttlc.intuit.com/questions/3756968
Yes, enter Canadian Form NR4, code 39 as 1099-R pension benefits.
The IRS publication 597 you referenced on page 3, column 1, that: "Pensions do not include social security benefits."
To add Canadian Form NR4, code 39 as if it were Form 1099R (retirement income):
1. Sign In to TurboTax Online.
2. Select "Take me to my return"
3. Select the "Search" or "Help" icon.
4. Type "1099-R" and select "Jump to 1099-R"
5. Select "Add a 1099-R" and continue through the interview questions.
To add the foreign taxes paid :
Remember to convert the Canadian funds to US $ before entering into TurboTax.
Yes, enter Canadian Form NR4, code 39 as 1099-R pension benefits.
The IRS publication 597 you referenced on page 3, column 1, that: "Pensions do not include social security benefits."
To add Canadian Form NR4, code 39 as if it were Form 1099R (retirement income):
1. Sign In to TurboTax Online.
2. Select "Take me to my return"
3. Select the "Search" or "Help" icon.
4. Type "1099-R" and select "Jump to 1099-R"
5. Select "Add a 1099-R" and continue through the interview questions.
To add the foreign taxes paid :
Remember to convert the Canadian funds to US $ before entering into TurboTax.
Thank you. I have been entering it as a 1099-R for many years with a Canadian company ID number but this year the system will not let me file. It keeps giving me an error and will not allow me to over ride it. Can you let me know how to proceed?
It responds with "Payer's I.D. is invalid for electronic filing". I have electronically filed for at least 6 years. This is the first year that it won't let me. Even if I leave it blank it still gives me an error asking for an ID. Has the system been changed?
Hello bkeating1, I have an NR4 for the first time ever. I figured I had to enter it as a sub 1099-R, and use the US Currency conversion. However, when you do this, do you also put in the tax withheld on the sub 1099-R? And do you also file for the Foreign Tax Credit?
To add Canadian address: To add or edit a W-2 with a Canadian address:
Click Federal (or Personal)>Wages & Income
• Select "Edit/Add" on the "Your income" summary screen
• To add a new W-2: scroll down and select "Add a W-2 for ..."
• To update the W-2 address: press "Edit" on the "Here's your W-2 info" screen
• Open the pulldown menu under "Address type" and select "Foreign Address"
• Click on the pulldown menu under "Country" and select "Canada"
Press "Continue" when finished.
So, I don't add the tax withheld on the sub 1099-R???? And I did do this, but I don't think I'm doing the foreign tax credit correctly? when I'm done with it, it has a zero amount.
What do you enter as payer ID number on 1099-R since it keeps asking for one? As for Foreign Tax credit can you confirm you need to put the taxes for pension before the ones for dividends due to something with the order of multiple 1116 forms are handled in TT so the credit is calculated properly
I didn't do a 1099-R, after a ton and ton of research, my particular NR4 could be filed as miscellaneous Income and that made the 1116 much easier to do. As for the second part of your question, I'm not really sure, hopefully you can find an answer on that.
I am unsure how to enter an NR4 Code 39 as a 1099-R in TurboTax. For example, the the 1099-R Box 7 is to "Select a code(s) that matches Box 7 of your 1099-R". What do I input there? 7? Thanks.
Box 7 Code 7 is for regular retirement received on a regular basis.
I did exactly this. The problem for me is that the IRS is rejecting the return because the payer identification number doesn't match IRS records. Turbo Tax adds a hyphen in the number that is not present on the NR4 form. I've been unable to contact anyone for help. Suggestions?
You can enter the income as "Other Income" if you don't file a tax return for a state that has special treatment of pension income. You can do so in TurboTax as follows:
1. Go to the "Federal" section of TurboTax
2. Click on "Income and Expenses"
3. Find "Less Common Income" and choose the last entry "Miscellaneous Income"
4. On the next screen, "Miscellaneous Income" choose the last entry "Other Reportable Income"
5. Enter a description for your entry, and enter the taxable amount you want to include
Hello, If I choose to enter as Miscellaneous Income, how can I can get the withheld tax back?
@HM888 Type 'foreign tax credit' in the Search area, then click on 'Jump to foreign tax credit'.
Continue through a few screens and indicate you want to 'Take a Credit'.
TurboTax then wants to go through your Dividend Income (if you reported any).
If so, you'll confirm what was already entered to continue to a screen asking about 'Type of Income'. Choose General Income category (screenshot).
You can choose the Country, and type in a description and amount of income.
Continue, and enter the amount of 'Foreign Taxes on Other Income'.
Continue through many screens that don't apply to you, (but may to others), to get to the Foreign Tax Credit Summary page.
You may not see the credit on the Deductions & Credits summary page, but it will show on your Schedule 3, Line 1 and on Form 1040, Line 20.
Click this link for more info info How to Claim a Foreign Tax Credit..
Thank you so much for the quick and detailed response. However, I also saw someone said that we can use the SSA-1099 form since Canada and US have an income treaty agreement. If it is okay to use the SSA-1099 , can I enter the withheld tax in box #6 Federal Tax Withheld after I convert the Canadian dollar to US dollar? It seems like that we will get more tax credit by using the SSA-1099, thanks.
@HM888 The IRS does 'document matching' so they will not have either a 1099-R or an SSA-1099 for you.
Definitely don't use the SSA-1099 section to report this income, since Social Security benefits are often non-taxable or only party taxable.
1099-R income is taxed the same as other income on your return.
The cleanest way to report your foreign pension income is by using 'Other Income' where you can enter a description of the income. No worries about 'fake' ID's or Efile errors.
Click this link for more info on Reporting Foreign Pension Income.
If you paid tax on the income, claim a Foreign Tax Credit. Choose 'general category income' to report taxes paid on Form 1116.
I have one more question. Do I need to pay the state and local tax on the Canadian pension Income? I live in Pennsylvania. If so, can I get the non-resident withheld tax back? Thanks.
@HM888 Depending on how you enter your Foreign Pension Income, you claim tax you paid in your Federal return, either on your Substitute1099-R entry or 'Other Income' category.
If using a Substitute 1099-R, you will not be taxed in Pennsylvania. You will be asked in the PA interview about your pension.
If using the 'Other Income' category, claim tax paid as a Foreign Tax Credit on your Federal Return.
Click this link for more info on Taxable Pensions in Pennsylvania.
[Edited 4/5/2021 | 11:10 am]
Hello:
I just noticed if I use the Treasury Department Exchange rate for the Canadian pension income, it will make my income a lot higher than the true pension income we received. The exchange rate on the Treasury Department website is around 1.28, but the average rate of the pension payments is around 1.74. Should I just report the actual total US dollar amount that deposited in my bank account because this is the truly payments that I received in 2020? Please advise, thanks.