Where to report employer pension contributions

That's not IRS tax code.....it's an agreement between the US and the UK to clarify the application of the treaty.

I know it isn't. Just because I asked for IRS tax code doesn't mean I got it

So when you file the 8833 with regards to a UK pension, I can find the US-UK tax treaty articles that I believe apply (18, 23, 25?) however I do not know what to put in these boxes:

2
List the Internal Revenue Code provision(s) overruled or modified by the treaty-based return position

4
List the provision(s) of the limitation on benefits article (if any) in the treaty that the taxpayer relies on to prevent application of that article

Is line 4 asking for the specific paragraphs? As to me, pretty much most of Article 18 is applicable?

Thanks,
J

You can hear the crickets chirping...... Not many answers to this one. I have the same questions. We've recommended a treaty claim many times on here but never actually described what to write in the 8833. There are online examples for claiming treaty relief on scholarships, but nothing for foreign pensions.


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US law requires that you explain why you have a supportable position.  This would typically include quoting the sections of US domestic law which might otherwise apply; treaty agreements on which one is relying, including explaining why any particular section of a treaty that is selected over-rides domestic law. 

US law requires that you explain why you have a supportable position.  This would typically include quoting the sections of US domestic law which might otherwise apply; treaty agreements on which one is relying, including explaining why any particular section of a treaty that is selected over-rides domestic law.

It's the specific bits of IRC that re overridden that is difficult to work out....which section of IRC is it for the deferral of taxes on the income and which for the gains. Quoting the treaty Article and the exception to the saving clause isn't the hard bit.

It's the specific bits of IRC that re overridden that is difficult to work out....

In the case that your treaty positions in Boxes 1 and 4 are excluding employee and employer pension contributions, which would otherwise appear on 1040 line 7 (wages, tips, etc), then I expect that the appropriate thing to put in Box 2 would be: § 61 - Gross income defined.

In the case that your treaty positions in Boxes 1 and 4 are excluding employee and employer pension contributions, which would otherwise appear on 1040 line 7 (wages, tips, etc), then I expect that the appropriate thing to put in Box 2 would be: § 61 - Gross income defined.

....and I expect the same section is quoted when applying to exempt any gains in defined contribution pension plans from US taxation.

There is no need to fill out the Form 8833 to take the position that the pension is not taxable until distributions occur.  The regulation quoted by omglolmax above is directly on point.

If you wanted to fill it out, Code §402(b) would be the section that is being overridden.  However, there is a fine line between Code §402(b) and Code §61.  I don't think anyone would complain if you put Code §61.

There is no need to fill out the Form 8833 to take the position that the pension is not taxable until distributions occur.  The regulation quoted by omglolmax above is directly on point.

If you wanted to fill it out, Code §402(b) would be the section that is being overridden.  However, there is a fine line between Code §402(b) and Code §61.  I don't think anyone would complain if you put Code §61.

I agree that no 8833 would not be necessary to exclude a employee's contribution to a UK pension, but what about the employer's contribution and the gains within the pension if it's defined contribution. Those two don't seem to be covered in the IRS exemptions from the 8833 filing requirement.


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The regulation states "* * * reporting is waived * * * with respect to any of the following return positions taken by the taxpayer * * * (iv) That a treaty reduces or modifies the taxation of income derived from * * * pensions * * *"

I would think that an employer's contribution into a pension and gains within the pension would both be considered income derived from pensions for purposes of this waiver.

The regulation states "* * * reporting is waived * * * with respect to any of the following return positions taken by the taxpayer * * * (iv) That a treaty reduces or modifies the taxation of income derived from * * * pensions * * *"

I would think that an employer's contribution into a pension and gains within the pension would both be considered income derived from pensions for purposes of this waiver.

but an employer's contribution to a pension isn't income derived from a pension?

Because a treaty is elective and the Regulations are unclear many people (but not everybody) decide to file 8833s each year as a form of insurance. It also tells the IRS what one has done.

The regulation states "* * * reporting is waived * * * with respect to any of the following return positions taken by the taxpayer * * * (iv) That a treaty reduces or modifies the taxation of income derived from * * * pensions * * *"

I would think that an employer's contribution into a pension and gains within the pension would both be considered income derived from pensions for purposes of this waiver.

The employer's contribution is not income derived from personal services....it's an employment benefit so it's not clear that it is exempt from 8833 filing. The investment gains within a defined contribution pension are certainly not income and if they are not exempted by using the treaty you would most likely have PFIC stuff to deal with.

If I derive an employment benefit from performing personal services, isn't that benefit derived from personal services?

If I derive an employment benefit from performing personal services, isn't that benefit derived from personal services?

You could argue it, but the employer's contribution is excluded from the FEIE because it is not seen as earned income, it's not part of your salary. The gains in a DC pension are obviously not connected with "personal services".