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Topic: Pension lump sum.... which form(s) do I use?  (Read 988 times)

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Pension lump sum.... which form(s) do I use?
« on: January 09, 2019, 12:48:02 PM »
Morning all!! First time back on UK Yankee in a couple years. Glad it's still here.

I retired in August after 36+ years service with the NHS.  On retirement I received a lump sum and a monthly NHS pension.

Can anyone point me in the direction of which forms I need to complete in order to declare this on my US tax return?

(I'm a US citizen fully resident and fully employed in the UK since 1973)

Glenn

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Re: Pension lump sum.... which form(s) do I use?
« Reply #1 on: January 09, 2019, 05:20:12 PM »
Well, when I looked last week the new forms were advisory only as they were being changed. But I think you'd need the new 1040 (they are doing away with 1040A, etc.) https://www.irs.gov/forms-instructions   

Also, IRS PUB 901 states:

United Kingdom
Income, other than a pension, paid from the
public funds of the United Kingdom, its political
subdivisions, or local authorities to an individual
for services performed for the paying governmental
body is exempt from U.S. income tax.
However, the exemption does not apply if the
services are performed in the United States by
a resident of the United States who either:
Is a U.S. citizen, or
Did not become a U.S. resident only to
perform the services.
Pensions paid by, or funds created by, the
United Kingdom, its political subdivisions, or local
authorities for services performed for the
United Kingdom are exempt from U.S. income
tax unless the recipient is both a resident and
citizen of the United States.

These exemptions do not apply to income or
pensions for services performed in connection
with a business carried on by the United Kingdom,
its political subdivisions, or local authorities.

My inclination is to think that NHS is not a business?

Also, don't forget to file the FBAR if your total bank accounts went over $10K at any point due to the lump sum. https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

https://www.irs.gov/forms-pubs/about-publication-54
https://www.irs.gov/forms-pubs/about-publication-901

Congrats on your retirement!
« Last Edit: January 09, 2019, 05:27:37 PM by Nan D. »


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Re: Pension lump sum.... which form(s) do I use?
« Reply #2 on: January 09, 2019, 09:18:02 PM »
That really gives me a good starting point Nan. I've really been fretting over this. Thanks!!

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