Hi,I received a $24,000 pension lump sum from the UK, with $18,000 taxable. After $6,000 was deducted at source, $17,900 was credited to my bank account in USA in 2024.I left the UK several years ago.I'm entering this distribution in 1099-R:Box 1 Gross distribution: $24,000Box 2a Taxable amount: $18,000, Total distribution: $17,900Box 7 Distribution code: Which code should I use?There's no box for the foreign tax amount of $6,000 deducted at source. Should I enter it in Box 8 Other and make a comment?How do I claim credit for the tax deducted in the UK to avoid double taxation?I will appreciate any help or suggestion.Thank you,Nurul Islam

@nhkyn , Salam Aliquom(a) Are you a US person ( citizen/GreenCard/ Resident for Tax purposes ) ? If not US citizen, then citizen of which country ? If you are on work visa -- Resident for Tax Purposes , which visa ?(b) Your pension distribution you said is lump sum , does this mean a total distribution ? Why is the taxable amount different from gross distribution ? Is this because of your own contribution or what ?(c) Was this your first year of pension -- is this because you are no longer a UK resident, because of age or what ?(d) Are you currently in the USA or in the UK ? I am trying to understand the whole situation, specifically for treaty considerations, taxability of the pension amount etc. Obviously and based on your answers, there may be more questions to answer. I will circle back once I hear from you --yes ? pk

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nhkyn

Question

Needs help in entering foreign pension distribution

Forum|Forum|11 months ago
April 14, 2025
1 reply
0 views

Hi,

I received a $24,000 pension lump sum from the UK, with $18,000 taxable. After $6,000 was deducted at source, $17,900 was credited to my bank account in USA in 2024.

I left the UK several years ago.

I'm entering this distribution in 1099-R:

Box 1 Gross distribution: $24,000
Box 2a Taxable amount: $18,000, Total distribution: $17,900
Box 7 Distribution code: Which code should I use?

There's no box for the foreign tax amount of $6,000 deducted at source. Should I enter it in Box 8 Other and make a comment?

How do I claim credit for the tax deducted in the UK to avoid double taxation?

I will appreciate any help or suggestion.

Thank you,

Nurul Islam

pk12_2

@nhkyn , Salam Aliquom

(a) Are you a US person ( citizen/GreenCard/ Resident for Tax purposes ) ? If not US citizen, then citizen of which country ? If you are on work visa -- Resident for Tax Purposes , which visa ?

(b) Your pension distribution you said is lump sum , does this mean a total distribution ? Why is the taxable amount different from gross distribution ? Is this because of your own contribution or what ?

(d) Are you currently in the USA or in the UK ?

I am trying to understand the whole situation, specifically for treaty considerations, taxability of the pension amount etc. Obviously and based on your answers, there may be more questions to answer.

I will circle back once I hear from you --yes ?

nhkynAuthor

Hi,

I worked at a UK hospital from 1993 to 1995 with a fully funded pension plan from the hospital. Since 1996, I’ve been in the USA and became a citizen in 2007. I waited until retirement age for full benefits. In the UK, 25% of pension fund distribution is tax-free, like Social Security benefits in the US. I never withdrew money from the fund.

I hope this answers your questions. Feel free to ask more.

Thank you,

pk12_2

@nhkyn ,

1. Since your pension is from National Health, is this public funds pension -- this is because most treaties , including UK, publicly funded pension and/or social security equivalent is generally taxable ONLY by the distributing country. If that applies here --- you should have some documentation to show whether this is true in your case --- then this income is taxable ONLY by the UK ( and therefore Tax at source ).

2. In any case for US 1099- R , the taxable portion generally is gross less recipient/employee contribution ( allocated or otherwise ).

Could you confirm that your employment during those years was for the NHS -- and therefore the pension should be marked as public funded. And not for a private hospital system.