If you received a foreign pension, you first must determine whether the foreign pension is taxable. TaxAct® has no process to determine this; please review the IRS links below to make this determination:

• United States Income Tax Treaties - A to Z
• IRS Publication 901 U.S. Tax Treaties
• IRS Publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad

Once you determine the amount of foreign pension that is taxable, there are two places you can enter the pension amount. In a few instances (based on treaties) the pension benefits can be entered as Social Security benefits. However, the most common place to enter foreign pension benefits is on the worksheet FEC Foreign Employer Compensation and Pensions.

To enter the foreign pension benefits in TaxAct on the FEC worksheet:

1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
2. Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand the category and then click Foreign pension distributions
3. Click New Copy of Form 1040 FEC (Desktop users click Add) to create a new copy of the form or click Review to review a form already created 
4. The program will proceed with the interview questions for you to enter or review the appropriate information

On the screen titled Foreign Employer Compensation and Pensions - Payer's Name, you must enter the name of the foreign country in the box Payer's Country Code. If you do not enter the foreign country, you will receive a Red Alert titled FEC - Employer Information during the electronic filing steps, which will prevent you from being able to e-file your tax return.

The FEC worksheet is not an IRS form, but is a worksheet only in the TaxAct program used to collect the information and transfer it to the appropriate place on the return.  All information entered on the worksheet is transmitted with the return if it is electronically filed.  If the return is paper filed, there is no documentation required to be sent with the return.  The IRS will contact the taxpayer if they need any additional information on the amount entered on the return for foreign retirement income.  If you would still like to print the FEC worksheet to mail with the return, the following steps will allow you to do that.