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Entering foreign income for Individuals in ProSeries

by Intuit•1• Updated 10 months ago

This article will help you:

Enter foreign income reported on Form W-2.
Enter foreign income reported on other statements, such as a form or letter.

The United States has agreements with several countries concerning the treatment of foreign pensions, annuities, or Social Security income. Refer to this IRS resource to access an article concerning this topic.

Follow these steps to enter foreign income reported on a Form W-2:

Open the tax return.
Open the Form W-2 Worksheet.
Enter the W-2 information as you normally would.
On line 13b check the Foreign source income eligible for exclusion on Form 2555 box.

Follow these steps to enter foreign income reported on a other statement, such as a form or letter:

Open the tax return.
Press the F6 key to open the Open Forms window.
Type WA to highlight the Wages, etc, Wks.
Select the OK button to open the Wages, Salaries & Tips Worksheet.
Enter any foreign wages on line 4 for the taxpayer or spouse.
Check box 4 to flow the wages entered to the 2555.

How do I enter foreign Social Security benefits on Form 2555?

ProSeries doesn't have an entry field for Social Security benefits on Form 2555, because Form 2555 doesn't recognize Social Security benefits as foreign earned income.

Per the IRS Instructions for Form 2555, foreign earned income doesn't include the following types of income:

"Pension and annuity income (including social security benefits and railroad retirement benefits treated as social security)."

How does ProSeries handle foreign pensions on an Individual return?

There's no particular entry for foreign pension. The income may be added on Form 1099-R—or entered as other income on the Other Income Worksheet.

You may enter Form 1116 to calculate a credit for any taxes paid to the foreign country. Refer to this article for more information.

If a Form 1099-R is added to the program to report the income, the return will have to be paper filed, as the Federal Identification Number is required for electronic filing.

For more information, refer to The Taxation of Foreign Pension and Annuity Distributions or the IRS Instructions for Form 1116.

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