When a tax form mentions "military pension", is it referring to USA only, or include foreign military?

ch_ferreira — Mon, 10 Feb 2025 20:42:54 GMT

Foreign income is to be taxed, same as USA based income. A peeve I have is with forms/instructions that do not differentiate between domestic(USA) vs foreign military in situations when they are treated differently. When reading "military pension" or "military retirement", one would think it applies to all military situations but that's not always the case.

Here's my current issue:

Using manual entry for a 1099-R to report foreign military retirement income.
NOTICE the term: foreign!

On TurboTax 1099-R form I enter only: 1. Gross Distribution and 4. Federal Income Tax Withheld.
(both numbers obtained by converting annual total in foreign currency to US$ using IRS yearly exchange rate)

So far, so good!

Subsequent questions in TurboTax on the 1099-R form include:
Where is this Distribution from?
1. Pickup contribution
2. Active or Reserve military retirement
3. Self employed retirement income from a plan.......
4. none of the above

When I click on the "Learn More" button, it explains that in Maryland (my state) there is a special handling of pension distributions. One of them is for Active or Reserve military retirement. Selecting this entry, the Maryland tax due reduces significantly. Obviously I would like to use it, but is this applicable to foreign military retirement, or just USA?

I tried searching the Maryland tax laws online with many keywords, but couldn't find this particular issue. The only entries I found repeat the same "military retirement" statement, without specifying USA only, or ALL.

Thanks for any help!

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...

SusanY1 — Mon, 10 Feb 2025 20:59:49 GMT

The military retirement deductions are specific to only US military retirement income sources. In your case, the answer would be #4 "none of the above".

You can find where Maryland specifies qualifying military service HERE.

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...

ch_ferreira — Mon, 10 Feb 2025 20:59:21 GMT

Thanks for the prompt reply, Susan. I was afraid so!!

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...

SusanY1 — Mon, 10 Feb 2025 21:00:24 GMT

You're welcome. It never hurts to double-check!

topic When a tax form mentions "military pension", is it referring to USA only, or include foreign military? in State tax filing

When a tax form mentions "military pension", is it referring to USA only, or include foreign military?

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...

Re: When a tax form mentions "military pension", is it referring to USA only, or include foreign ...