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Why wouldn't it be taxed by the US?
In the absence of an exclusion I'd say it is taxable pension income. If subject to UK tax, too, a Foreign Tax Credit is available.
The more I know the more I don’t know.
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Thank you for your help!
Would I be filing this on any certain form? 2555 or 1116? My brain is spinning from trying to reach a correct answer.
I should preface this by saying I'm one of Walter's colleagues, Tish (I am a newbie AFSP tax preparer) using his ProSeries account to reach out to all of you experts!
Another colleague has suggested entering the pension amounts on the Foreign Employer Comp and Pension (FEC) worksheet...and he said it would transfer the numbers to Form 1116 and 1040. However, ProSeries does not seem to have this FEC worksheet.
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Would I enter her pension on a W2 worksheet? and then check the box: Foreign source income eligible for exclusion on Form 2555?
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It is not a w2.
Is the person a US resident living in the US? If so enter it as pension income. If there is withholding from the UK, then go to work on the 1116. Foreign income exclusion is for Foreign EARNED income (wages,) not for pension.
Answers are easy. Questions are hard!
