Should I enter a Canadian NR4 with income code 39 as 1099-R or SSA-1099.

[HM888]

Hello,  If I choose to enter as Miscellaneous Income, how can I can get the withheld tax back? 

[MarilynG1]

@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.. 

[HM888]

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. 

[MarilynG1]

@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. 

[HM888]

Thank you so much! Your help is greatly appreciated!

[HM888]

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. 

[MarilynG1]

@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]

[HM888]

Thank you again. 

[HM888]

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. 

[HM888]

correction: the average rate of monthly payment is 1.32 not 1.74. 

[HM888]

Never mind.  Please disregard my question, I am good.  Thanks. 

[HM888]

Hello,

I entered the Canadian Pension as "General Category Income" and use "Foreign Taxes Credit" to get the withheld tax back.  In addition, I also have a small amount of foreign tax withheld from  Mutual Funds, and I selected the Passive Income to get the MF fund foreign tax withheld back.  However, my tax submission was rejected multiple times even there's no error found.  Please see below error message, I have tried many times and don't know what I did wrong.  is it possible that  I couldn't submit my tax online due to large amount ( over two thousands dollar of foreign tax credit) on my tax return?  Please help, thanks. 

There was an issue with the submission of this return.  To correct, navigate to Deductions & credits Tab, under the menu heading Estimates and Other Taxs Paid choose foreign tax credit.  Proceed to answer all the questions in the topic. 

[HM888]

Hello,

I think that I have found the issue.  This is the first year, my foreign tax credit is more than 300, so I need to choose "Simplified  Foreign Tax Limitation" .  Once I choose this, I can't submit my tax online.  I don't need to pay any ATM, do I still have to select the Simplified Foreign Tax Limitation for the first time or I can just choose the Non-Simplified AMT and wait until I need to pay ATM ( unlikely)? 

I will receive the Canadian Pension income every year from now and on, so please advise.  

If I have to choose the Simplified foreign tax limitation due to I will be  receiving the Canadian Pension income every year going forward, then I will just print out and filing by mail.  Thanks.