Employer/employee pre-tax pension contributions, Form 8833

Hi,

I am a British expat on assignment in the US since 2008. Until 2010 compilation and filing of my US tax return was completed by an accountancy firm that my firm paid for, as part of the relocation/transition package. For 2010 I used another firm, and I got stung pretty badly for fees so for 2011 decided to use TurboTax. I notice from previous years my accountants have filed form 8833 along with my return relating to my employer pension scheme in the UK, declaring just the existence of the pension, and that the only contributions were made by my employer and have therefore "not been included in taxpayer's taxable income".

From 2011 I opted to contribute further myself out of pretax salary, which my employer then matches (in addition to the base contributions they were already making). Do any of these changes generate US-taxable income that I did not have in prior years? (If i was in the UK none of this would be taxable.) And do I really need to file 8833 if I'm not receiving any distributions from the pension? I had a colleague in similar situation to me who did not file one at all.

Thanks!

The 8833 is used to claim a treaty exemption from US tax on your employer's and your contributions. You can only exclude up to the amounts allowed by the IRS. Anything above that amount will have to declared as US taxable income. Also be careful that you don't contribute more than your employer to the pension as many advisors then believe that the pension would then have to be treated as a foreign grantor trust for US tax purposes.

Also what IRC code is written in 8833 box 2?

Thanks for your reply, nun. In fact box 2 has been left blank. Box 1b states "Article 18 - PENSION SCHEMES".
I definitely contribute less than my employer. Do you know where I can find the maximum amounts allowed by the IRS that can be excluded under this arrangement? I suspect I'm within the limits but obviously want to be sure.
Thanks again!

I'm not sure about the limits as the US has different limits for different types of plans. Most defined contribution plans like 401k, 403b etc have a $17k limit for 2011 if you are under 50. However defined benefit plans have far higher limits and I', not sure which limits would apply to your UK employer pension.

Ok thanks nun, will do some more digging on limits. Best,