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richarddrd
New Member

Where and how do I enter income from foreign pensions. I received money from Luxembourg state pension in 2016.

 
1 Best answer

Accepted Solutions
GeoffreyG
New Member

Where and how do I enter income from foreign pensions. I received money from Luxembourg state pension in 2016.

Thank you for asking this question.  Please note from the outset that this answer does not address the tax treatment of your (Luxembourg) pension income, from the perspective of any other country aside from the United States.  It also does not consider any tax treaty provisions that may be in effect between the US and Luxembourg.  In other words, the scope of this answer is restricted to the US tax treatment and reporting of this item only.  Any taxes due or forms required by the other country involved are beyond the purview of this response.

That said, there are some good existing answers on this very topic (foreign pension income, that is), on a few of the other TurboTax AnswerXchange threads.  They provide mechanical instructions for entering foreign pension income into TurboTax (and thus onto a US tax return).  Here are those links, so that you can read them for yourself:

https://ttlc.intuit.com/questions/3175138

https://ttlc.intuit.com/questions/3642520

https://ttlc.intuit.com/questions/3833087

 

Essentially those answers propose one of two different solutions.  Under one method you can input a foreign pension or non-US Social Security payments into TurboTax (and thus report them on a US tax return), by creating a "substitute" Form 1099-R.  It does not matter whether the income was a one-time lump sum payment, or an annual (ongoing) pension stream of monthly payments.  It still gets reported, and taxed, the same.

Alternatively (and also preferably as well, because it is easier to do), you can enter the foreign pension income on Form 1040, Line 21 as "other income" or "foreign pension."  If you choose this way, then you won't have to create a substitute Form1099-R, by filing Form 4852.

However, the end tax result (in terms of United States tax rate and amount assessed) will be identical under both methods.  You can enter a Line 21 amount in TurboTax by using the following pathway Federal Taxes -> Wages & Income -> Less Common Income -> Visit All and then proceed through the interview until you find an appropriate place to declare the foreign income and type in an accompanying description.

Thank you again for asking about this.

View solution in original post

2 Replies
GeoffreyG
New Member

Where and how do I enter income from foreign pensions. I received money from Luxembourg state pension in 2016.

Thank you for asking this question.  Please note from the outset that this answer does not address the tax treatment of your (Luxembourg) pension income, from the perspective of any other country aside from the United States.  It also does not consider any tax treaty provisions that may be in effect between the US and Luxembourg.  In other words, the scope of this answer is restricted to the US tax treatment and reporting of this item only.  Any taxes due or forms required by the other country involved are beyond the purview of this response.

That said, there are some good existing answers on this very topic (foreign pension income, that is), on a few of the other TurboTax AnswerXchange threads.  They provide mechanical instructions for entering foreign pension income into TurboTax (and thus onto a US tax return).  Here are those links, so that you can read them for yourself:

https://ttlc.intuit.com/questions/3175138

https://ttlc.intuit.com/questions/3642520

https://ttlc.intuit.com/questions/3833087

 

Essentially those answers propose one of two different solutions.  Under one method you can input a foreign pension or non-US Social Security payments into TurboTax (and thus report them on a US tax return), by creating a "substitute" Form 1099-R.  It does not matter whether the income was a one-time lump sum payment, or an annual (ongoing) pension stream of monthly payments.  It still gets reported, and taxed, the same.

Alternatively (and also preferably as well, because it is easier to do), you can enter the foreign pension income on Form 1040, Line 21 as "other income" or "foreign pension."  If you choose this way, then you won't have to create a substitute Form1099-R, by filing Form 4852.

However, the end tax result (in terms of United States tax rate and amount assessed) will be identical under both methods.  You can enter a Line 21 amount in TurboTax by using the following pathway Federal Taxes -> Wages & Income -> Less Common Income -> Visit All and then proceed through the interview until you find an appropriate place to declare the foreign income and type in an accompanying description.

Thank you again for asking about this.

Garbanzor29
Level 2

Where and how do I enter income from foreign pensions. I received money from Luxembourg state pension in 2016.

I used the Turbo Tax IRS Free File version, and it took me a while to figure out how to solve this problem.

 

The following worked for me:

I selected FINANCIAL INSTITUTION (the default first choice), and

I chose TYPE IT IN MYSELF to enter the foreign pension information.

I then entered the foreign pension payer name, chose FOREIGN ADDRESS, and entered that, too.

For the Payer's TIN, I entered ALL ZEROES (00-0000000) and it worked!

It then required a distribution code, so I chose 7, which is the code for a "normal" distribution.

 

Only at the end of the process did it give me a screen that said, 

"Tell us if any of these uncommon situations apply."

The third choice there was "I need to file a substitute 1099-R."

And that took care of it!!

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