Where do I specify foreign taxes withheld on foreign Social Security income? I don't see a way to do this on substitute form 1099-R.

To enter a foreign social security income or pension in TurboTax online, here are the steps:

• Sign in to your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "1099r" and Enter
• Select Jump to 1099r
• Follow prompts
• On-screen, Tell Us Which 1099-R You Have, check the box you need to create a substitute 1099-R to continue.  See the image below

-As to the Federal ID, if there is no identification number provided, enter nine 9s.  If electronic errors occur due to 1099-R data entry, enter the social security income under Miscellaneous income, see instructions below.  As long as the IRS has the social security reported and included in total income, it is not problematic. 

To enter information under Miscellaneous Income, follow the steps here:

• Sign in to your account, select Pick up where you left off
• To your left, select Federal taxes 
• From the top, select Wages & Income
• Scroll down to Less Common Income ( very last section on the screen) 
• Select Miscellaneous Income, 1099-A, 1099-C- Start 
• Select Miscellaneous Income- Other income not already reported on a Form W-2 or Form 1099- Start 

Thanks LinaJ2020 for your quick response.  However, it only explains how to enter foreign social security income, something I know how to do and have done in past years.  My question was how to report the *foreign tax* withheld on the foreign Social Security income.  This was not an issue in the past, since they started withholding tax in 2019.

I don't see why you would need to report foreign tax withheld on your tax return, unless you are over the social security tax income level, or consider it foreign income taxes and want to get a credit for it. If so, you can enter it separately in the foreign tax credit area of TurboTax.

Go to the "Foreign taxes" section under "Estimates and Other Taxes Paid" in the "Deductions & Credits" section of TurboTax to see if you qualify for a credit for foreign taxes paid.

Please keep in mind that social security is not a tax, it is a contribution to your retirement account with the government.

Thanks for another fast response.  Yes, I receive US Social Security as well and I am over the Social Security tax income level.  It is indeed a tax credit I am after.  Following the 'Foreign Taxes' section, I think I have found a way to report the taxes that were withheld.  Thanks so much!

what country because the US has tax treaties with certain countries that exempts the foreign social security from taxation in the US? 

The country in question is the Netherlands, and there is indeed such a tax treaty.  I am in the process of making sure this treaty applies to my particular case.  I decided not to bring this up in my original question since this is not a Turbotax specific issue.  But good point, I appreciate you bringing it up.

If your country withholds income tax on your social security income, you can get the so called Foreign Tax Credit by filling Form 1116 attaching it to your Form 1040, unless otherwise specified by a bilateral previsional treaty between your country and the US. 

Netherlands article 19, #4states: Subject to the provisions of paragraph 2 of Article 20 (Government Service), pensions and other payments made under the provisions of a public social security system and other public pensions paid by one of the States to a resident of the other State or a citizen of the United States shall be taxable only in the first-mentioned State.

If this is what applies to you, then you need to report the income with the substitute 1099-R and then subtract the income back off the return. To do that:

1. go to the income section,
2. scroll to the bottom option,  Miscellaneous Income.
3. select,
4. scroll to the bottom again, Other Reportable Income,
5. select.
6. Enter the income as a negative and the description as Netherlands treaty.

Then, no need to enter foreign tax paid at all.

If this is not your situation, enter the income and enter the foreign tax paid. Where do I enter the foreign tax credit (Form 1116) or deduction?   Note, you can try both options. The credit is most commonly used.

So why can't I just enter the total amount - tax paid in the "substitute 1099R" for the Dutch Social Security instead? Doesn't all this information ends up anyway at the IRS since it was claimed under the USA Social Security system?

No.  If you enter the tax in the manner you suggest, this tells the IRS that these are US and not foreign taxes paid.  Foreign taxes paid are handled differently because of the manner that the Foreign Tax Credit is calculated and reported in your return.  Here is a step by step guide on how to enter.

1. Open (continue) your return in TurboTax
2. Enter all your foreign income in Wages & Income if you haven't already
3. Select Search, enter foreign tax credit and select Jump to foreign tax credit
   • Or go to Deductions & Credits, and select Start next to Foreign Tax Credit under Estimates and Other Taxes Paid
4. When you reach the screen Do You Want the Deduction or the Credit? select the option you prefer for your situation
5. If you select Take a Credit:
   • Select Continue on the next screen, then select No to fill out Form 1116
   • When you reach the screen Country Summary, select Add a Country
   • Answer the questions about your foreign income, taxes, and expenses on the following screens
   • When finished, you'll be taken back to the Country Summary screen. If you have income from other countries to enter, select Add a Country. Otherwise, select Done
   • Answer the questions on the following screens until you reach your Foreign Tax Credit Summary. If you’re finished with this section, select Done

Hello,

Unfortunately when I use "Take a Credit" and add "Netherlands" as a country, the software does not offer me the "substitute 1099 R" form that I filed for the Dutch Social Security...

It shows me only some entry associated to some investments that reported a small amount of Foreign Tax paid...

How do I associate the Foreign Tax Paid for the Dutch Social Security declared on the "substitute 1099 R"??

Thanks for the help!

Don't try to use a Substitute 1099-R to report your Foreign Pension Income.  You won't be able to Efile without an EIN, which you don't have. 

Report it as Other Taxable Income, then claim the Foreign Tax Credit. 

• select Federal
• select Wages and Income
• Scroll down to last section -Less Common Income -select  Miscellaneous Income, 1099-A, 1099-C- Start 
• Next screen, scroll down to Other Reportable Income- Start
• Enter description (foreign pension) and amount as Other Taxable Income

 In the Foreign Tax Credit section, there are five kinds of income to associate your tax paid with.  Choose 'passive category' or 'general category' as the income type you are claiming the credit for.

Here's more info on Claiming the Foreign Tax Credit.

@DNN 

Thanks for the explanation but now I am reading also this:

There are also some taxes that cannot be included in the FTC:

• Taxes on income excluded from your U.S. gross income (If you do not include wages earned in another country as part of your U.S. income, you cannot claim a credit for foreign taxes paid on those wages)
• Taxes paid to a sanctioned country
• Sales tax, value-added tax, real estate taxes, or luxury taxes paid to a foreign government
• Taxes on foreign mineral, oil, and gas income
• Taxes from international boycott operations
• Taxes related to a foreign tax splitting event
• Social Security taxes paid or accrued to a foreign country with which the U.S. has a Social Security agreement

So I am terribly confused as I am told that there is no double taxation when there is a Treaty with the country that does pay the Social Security??? 

Can you please help some more and explain why the Taxes paid on Dutch SS to the Dutch state cannot be considered an FTC???

Tons of appreciation on the help... (and admiration!)

There may be a social security tax treaty with a foreign country that allows you to not include the foreign social security income from that country on your US tax return. Consequently, the associated foreign social security tax would not be allowed as a credit, as you cannot get a credit for foreign taxes paid on income that is not includable on your US tax return. @DNN 

Hmmm... So is there any support at Turbotax that would help decipher the treaties as it is certainly absolutely not clear whether you have or not to declare the "Foreign" Social Security income... The legalese descriptions are not understandable to any senior average person!!!

Thanks, any help is welcome! 

Foreign social security income is generally taxable on your US return, unless you are covered by a "Totalization Agreement".  You can find a list of the countries where the US has these agreements HERE.

I agree, the descriptions and legalese aren't always easily understandable - and that's not just applicable to average seniors!  This is particularly true of these Totalization Agreements - so if you're not certain if you're covered, you may wish to report the income as taxable and then include the tax paid for a foreign tax credit, or consult with an advisor familiar with foreign income tax matters.  (Odds are that you are paying higher tax on the income in the other country than would be due on it in the US.) 

Foreign withholding or taxes paid aren't entered on the substitute 1099, as that implies withholding that has been sent on your behalf to the IRS.  Instead, you will leave the withholding number blank on the substitute 1099-R section and enter the tax you paid to the other country in the section for foreign tax credits in TurboTax. 

Follow the instructions found HERE to enter the taxes paid for the foreign tax credit. 

Please let us know if you have additional questions.



 

Yes the Netherlands are in the list for "tax treaty"... and I had hoped it was clearly stating whether the Dutch Social Security was part of some "exclusion" as to not go through the headaches of figuring out HOW to do all those crazy steps that I have a hard time to follow... But I guess that would make my life too easy and this seems to definitely NOT be the aims of any administrations...

Unfortunately I don't think your statement is true about having paid enough taxes because it seems that the Dutch don't tax Social Security payments as much as what the US is taxing but I might be wrong...

Thanks for the answers, I will try for the nth time to tackle these entries and probably come back with even more questions ... 

Stubborn old persistent tax payer.

It depends.  According to Article 19 Line 4 of the US/Netherlands Tax Treaty, "Subject to the provisions of paragraph 2 of Article 20 (Government Service), pensions and other payments made under the provisions of a public social security system and other public pensions paid by one of the States to a resident of the other State or a citizen of the United States shall be taxable only in the first-mentioned State".

This means that social security or other public pensions are only taxable in the Netherlands if you are a citizen of the US, thus should not be reported on a US return.

US/Netherlands Tax Treaty

@DNN 

Well I think this works only if your SS Payer has an EIN if you wish to eFile?

Hello,

I already have entries from my 1099 DIV and everything's get "messed up" when I try to add that FTC for my Dutch Social Security... is there a set of Instructions to follow to just add the one form and have the prior entries that showed up "automatically" left undisturbed??? 

Thanks!

Thanks to make it clear!!! I cannot make you know how much help this is!!!

To clarify, why are you even adding the Dutch Social Security when it isn't reportable in the US and you have already paid tax on it in the Netherlands? Since you are not adding it as income in the US, you can't claim a foreign tax credit on it.  Leave it out since it is not reportable in the US according to the US/Netherlands tax treaty.  

Now since this is eliminated, your prior entries should be left undisturbed.

I got the clarification about not having to enter the Dutch Social Security Income after the trials... Thank you for the help, I'll try to finish again tomorrow (removing it... and checking...).

Thanks again!

And I was concerned about this statement from the IRS as I did not understand what is the "Saving Clause":