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I would just enter as "Other Income" which can be found in the same section as Social Security.
If you put it on l040 as other income it will be taxed as ordinary income which it is not.
If the recipient is a resident of the United States, the benefits:
We have a treaty with Canada and pensions are given special tax treatment, and not treated as ordinary income.
@Terry53029 That blog doesn't even scratch the surface of the related articles in the DTA. That's great for SEO that draws potential customers but I wouldn't rely on that as an international tax professional.
@nav There is a lot more to consider. You may like to refer to a recent discussion for what you should take into account: https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/canada-form-nr4/00/5309...
@nav Assuming it is Canadian pension and you would like to e-file the return, you would make the input for the pension by scrolling down to the bottom of that section for Foreign Employer Pension. Check the box for Compensation not reported on 1099, and select Canada from the dropdown for Country code if work not performed while residing in the U.S.
I also assumed you have double checked the type of pension payment it is, to determine the proper amount of tax Canada may (or may not) assess under the relevant treaty protocol and article and, hence, the extent to which FTC can be claimed on the US return.
@itonewbie your right and thanks for getting involved, I was in kind of a rush, but just trying to get original poster to do research his self. I get very few of those and make sure I know the kind of pension it is, and go from there. Would be unfortunate for his client just to put it on other income as that is probably not correct. Again thanks itonewbie
If it's not ordinary income, what is it? I always treat it like SSI, maximum 85% of which is taxable as ordinary income.
@Accountant-Man That the point, original poster was advised to just put on other income, but it ALL is not, only the taxable part.
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