How to add a foreign pension

[Kosetife]

I agree 100 % because IRS is clear stating that foreign sourced social security pension must be tax treated like foreign pension or foreign annuities,  meaning to say are fully taxed unless a bilateral totalization agreement between the foreign country and the US exists stating otherwise . 

My query is that with that in mind for the IRS is indistinct that be reported : (i) on line 5b) as a pension ,  (ii) on line 6b ) as a social security or (iii) on Line 2 Schedule - line  10, 8z as miscellaneous / other income , because is 100 % taxed the same in the three options . 

The point is that if it’s reported on line 5 b) or 6 b) it’s necessary to inform the Form 1099 R for the first or Form xxx for the second and most of the foreign Payor don’t issue such documents . This could create confusion to the IRS because on top of that by filing online TurboTax system doesn’t allow to attach or enclose an explanatory note to clarify the matter .  

Furthermore many of us that receive a monthly foreign social security pension do not get it through any distribution because it’s a direct payment from a foreign government agency similar to US Social Security Administration . 

Thus,  the easiest and less bureaucratic way to report it , is as Miscellaneous / Other Income as I said above because it can be written “ Foreign Social Security Pensión from xxxxx” including instead of xxxx the country name . 

After all this I said , can anybody let me know how to fill out Form 1116 related to Foreign Tax Credit because indications online states that one must “Jump to link it” but I don’t see in my computer screen and on my cell screen either from where I must to jump . I don’t see the way to access to such Form 1116 , it’s no clear enough in TurboTax system .

Furthermore is not clear either to find Form 8962 related to Advance Premium Tax Credit to fill it out and also Schedule B (Form 1126) related Foreign Tax Carryover Reconciliation Schedule in order to carryforward the unused Foreign  Tax Credit of previous years and to use it now in 2024 Tax Return . 

Anybody that can elaborate on this will be appreciated and useful for all of us in this TurboTax community . Thanks in advance . 

[DaveF1006]

To access the Foreign Tax Credit section.

1. Go to Federal
2. Deductions and credits 
3. Estimate and other taxes paid 
4. Foreign Tax Credit>start or revisit
5.  As you go through the screens, when it asks "Tell Us About Your Foreign Taxes" select none of these apply.
6. When it asks if you wish to take the deduction and credit, take the credit
7. Here you can proceed through the interview and enter information that is asked for.
8. At the end of the section, you will reach a screen asking about Federal Tax Carryovers. Here you can report information regarding past carryovers. 

Form 8962 is used to calculate and reconcile the Premium Tax Credit (PTC), which helps eligible individuals and families cover the cost of health insurance purchased through the Health Insurance Marketplace.  Here is where to access that information.

1. Go to the Deductions and Credits section of your return.
2. Go to medical
3. Go to Affordable Care Act (Form 1095-A).
4. When you enter your 1095 A information, the results will generate Form 8962.

As far as Schedule B. I assume you mean Schedule B Form 1116. This is generated in step 8, in the steps I listed above for the Foreign Tax Credit. It will appear based on how you enter the carryover information in Step 8 above.

@Kosetife 

[Kosetife]

David I know that you know a lot about tax return and how to used in the best possible way TT e-filling system. Following your advice this year I decided to report my Foreign Social Security Pension on Line 8 of Form 1040 / Schedule 1 as Miscellaneous / Other Income . I have the problem that regarding Form 1099 MISC the system requires me to put the Federal EIN but because I’m my case the Payor is a foreign one it’s equivalent EIN has more digit that the digit that have the US Payors . So, the system doesn’t accept neither the EIN of my foreign Payor nor [removed], nor [removed] nor any other dummy number like [removed]. Furthermore the e-filling doesn’t accept either the zip code of my Foreign Payor because obviously the system only is focused on US zip codes. Incredible . Is there any way to prepare the Form 1099 MISC for Foreign Payors ? Which is thd solution ? Perhaps to attach an explanatory note but I was told by somebody of this chat that TT e-filling doesn’t allow to enclose / attach any note at all. What happen if I to “tools” and I delete the Form 1099 MISC ? Then if IRS request some clarification I would reply with an extensive and well grounded explanatory letter by certified mail and that is it. What fo you think ? Thanks in advance 

[Kosetife]

In addition to my previous message when you see (removed ) I had written ([removed]) , ([removed]) and ([removed]). 

[Kosetife]

Sorry I write numbers but the posted message says removed instead . Why ? Anybody knows ?

[AmyC]

The program removes information it thinks is personal. To file, use can use a foreign address but zip code change to 00000. Use a fake EIN of 99-9999900. If your state has a retirement benefit, you may want to use the 1099-R entry  to report the income. Entering it as "other income" is fine for the federal. You don't want to enter it as a 1099-MISC.

To report it as Miscellaneous Other Income:

1. go to the federal income section
2. scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, Start
6. Other taxable income?
7. Select YES
8. Description  - Foreign social security
9. Amount, enter your amount
10. Continue

To enter it as a 1099-R, a normal entry for normal pension follow these steps:

1. Log back into your return
2. Go to Federal Income section
3. Select 1099R and Edit
4. Continue through entry screen,
5. Double check, IRA box is blank
6. Continue
7. Public Safety Officer, NO
8. Continue
9. Where is this from? usually None of the Above, but select the correct answer for you
10. Continue
11. Select From a qualified plan
12. What did you do?
13. Select something else, cash, etc
14. Continue
15. Periodic payments?
16. Select yes, you get monthly checks
17. Continue
18. Withdrawal due to disaster?
19. Select NO
20. Continue

@Kosetife