Foreign stock award and pension savings - how to correctly report and avoid double taxation (DK/US)

[peric_danijela]

I was previously employed in Microsoft Denmark, where I received a stock award grant (FY 2022), that continued to vest during 2023 (and into the future).
I am liable to pay Danish income tax on the stocks from that award that vested during 2023 (proportionately to the number of days spent working in Denmark for the vesting period). However, US taxes were already fully withheld by Fidelity (in partial stock) for the same stock at vest time. Can you point me to any available documentation on how to handle this, to ensure I avoid double taxation and receive a return of a portion of the withheld stock for tax purposes?
If I am for example liable to pay taxes on 50% of the vested stock in Denmark, and 50% in US, given that Danish taxes are higher, can I claim credit for the full amount paid in Denmark, mitigating some of the US tax due?
I also have a foreign pension savings account in Denmark and am wondering what my obligations are with reporting it. I am already paying taxes in Denmark on unrealized gains on this investment, and would like to make sure that everything is correctly reported and not taxed twice.

Thank you!

[RobertB4444]

Any foreign taxes that you pay on income also taxed in the US can be claimed on your US tax return.  If the foreign taxes are greater than the US taxes then you have a credit to use against other income.

If your foreign account has a value that exceeds $10,000 then you are required to report it each year on a form 114 electronically through the BSA network (Here's a link).  The form is not included with your tax return but also has an April 15 deadline.  If it's under $10,000 there are no reporting requirements.

@peric_danijela 

[peric_danijela]

Thank you Robert.

Do I understand correctly that the FBAR form simply reports the existence of the account to the IRS, and does not involve any potential tax liability on the earnings?

[RobertB4444]

Correct.  It's the government's way of keeping tabs on money moved outside the US.

@peric_danijela 

[peric_danijela]

Also, reading about the FBAR on the IRS website, I found the following information:

 You don’t need to report foreign financial accounts that are:

• Correspondent/Nostro accounts,
• Owned by a governmental entity,
• Owned by an international financial institution,
• Maintained on a U.S. military banking facility, 
• Held in an individual retirement account (IRA) of which you’re an owner or beneficiary,
• Held in a retirement plan of which you’re a participant or beneficiary, or
• Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.

How can I be sure if my pension savings account needs to be reported?