How to enter Foreign Pension as Pension Income

[Art102]

I live in the USA and have 2 Foreign Pension sources.  Swiss Social Security Pension (100% taxable) and Swiss Employment Pension (partially taxable).  They do not provide a 1099R.

Requirement:  Enter these Foreign Pensions as Pension income on form 1040 (not Other Income) so that it will flow into the Georgia State return as Pension Income, and be reported properly on 1040.

I qualify for Property Tax exclusions worth several thousand, but only if the income is entered as Pension Income.  

What is the solution in Turbotax?

1) Substitute 1099R.  This puts it in the correct place on the return, but how to do this without a FID number.  Is there a dummy number or???

2) Is there a way to override, like enter the numbers in 1040 directly with a reference to a worksheet? 

Note: H&R Block and other tax professional programs seem to be able to do this, but I would much prefer to do my own taxes. Is there a solution or do I need to dump Turbotax????

[DaveF1006]

It depends. Please see my previous post that I have posted regarding this manner. I am reaching out here because there is no way to override this in a worksheet. You would need to enter the EIN in section of the 1099R where it is asked.

As mentioned in my previous post, you can try entering all nines or 99-9999000 to see if this is accepted for electronic filing.

@Art102 

[Frank1953]

Some years ago you could enter 99-9999999 as FID on a substitute 1099-R. Then the next year it was 11-1111111, or 00-0000000. But last year and now in 2024 none of these work. Is Intuit ever going to fix this?

[ThomasM125]

It may be an IRS requirement as per this note in the TurboTax program:

@Frank1953

[Frank1953]

Thanks, that's a note from TurboTax, it seems, rather than a note from IRS. 

[DaveF1006]

Yes, the IRS is more strict in their reporting requirements regarding foreign TIN numbers.

[Art102 · Accepted solution]

So, in Summary only hacks, but no solution, and TurboTax seemingly unwilling to fix the problem given the number of years this is going on as a problem in the community.

Summary:

1) IRS instructions for 1040 say to report Foreign Pensions on 1040 lines 5a and 5b. 

2) The only way TurboTax supports filing Foreign Pensions so that they are reported on Lines 5a/b is essentially to pretend they are domestic pensions and fill out a substitute 1099R, which the IRS does not want or require since that is only for situations where you should have gotten a 1099R.

3) Even if we accept using that method, the IRS also does not want us to file with "bogus" EINs which is the only way TurboTax supports e-filing.  (this is not an IRS limitation)  And even the TurboTax employees cannot seem to agree on what number to use.  (Just try one until it goes through)  (really guys???)

4) The other suggested solution, to put Foreign Pension income in Other Miscellaneous Income is not how the IRS wants it to be filed.  It may allow you to submit the return but is not the correct way and it causes problems with State Returns.  1) It does not classify the income as retirement income in State Returns.  Many of us live in States where this is required in order to get retirement income exemptions, property tax exemptions sometimes worth thousands. 2) Some report issues with Foreign Tax credits using this method. 

5) Professional tax programs do not have this artificial limitation, and TaxAct consumer edition does not have this limitation.  I can simply fill out the Foreign Pension Income, identify the country and it puts it in correctly with the appropriate supporting statement.

So, Why does TurboTax continue year after year ignoring this problem?  As I will have Foreign Pension income for the rest of my life, and I don't want to use a HACK to file my taxes... looks like I will have to move on to TaxAct instead.  I tried and tried.   Maybe TurboTax will get the message one day. Until then... 

[Frank1953]

@Art102 Thanks for this clear summary of the issues and Intuit's failure over multiple years to resolve the problem. I too am reluctant to use a dubious hack rather than clearly reporting pension income as pension income.

[TexasTea]

@Art102 nice summary of this crazy situation with TurboTax!   I switched to TaxAct a couple of years ago because of Intuit's continued failure to deal with this issue.  I agree completely with your key point, which Intuit seems not to grasp, that their approach of using a substitute 1099R for a foreign pension is completely wrong.  It's not what the IRS requires or wants, and it is the root cause of years of problems for TurboTax customers.   It is astonishing to see the issue come up every year in this forum, while Intuit and their employee "Tax Experts" just dig in deeper creating more confusion with their advice for bogus workarounds like fake TIN's or entering the income in other incorrect ways, like "Other Miscellaneous Income".  I keep thinking about switching back to TurboTax, because TaxAct isn't perfect either.  But once again this year TurboTax has disqualified itself from consideration by failing to fix this flaw in the software.  So it's back to TaxAct for me.

[ChasinSF]

@Frank1953 In 2023 and again in 2024 I am using 55-5555555, it has worked with no issues.

[lesv-berry]

I have the same problem with foreign pension and have reported it on Schedule 1 line 10, but I do not have to be concerned about State income tax

[Frank1953]

Excellent!!! 55-5555555 it is!

[ChasinSF]

Let us know if it works for you too.  🤞

[Frank1953]

Yes, the magic 55-5555555 works perfectly. A few years ago it was 11-1111111 and before or after it was 99-9999999 and 00-0000000, but hopefully next year they will stick with 55-5555555.