Are pensions received from UK taxable IN US and or California?

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My client receives an annual pension from the UK having worked there for 20 plus years prior to coming to California USA. How should that pension be reported on forms 1040 and 540.?

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George4TacksAnswer

Level 15

Probable it is taxable. If tax paid on the UK pension in UK, then foreign tax credit for that amount paid. CA loves any kind of income, so taxable in CA

You probably need to get more information from the client about the type of pension and whether taxable in UK. Here is a starting point. https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

Answers are easy. Questions are hard!

George4TacksAnswer

Level 15

Probable it is taxable. If tax paid on the UK pension in UK, then foreign tax credit for that amount paid. CA loves any kind of income, so taxable in CA

You probably need to get more information from the client about the type of pension and whether taxable in UK. Here is a starting point. https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

Answers are easy. Questions are hard!

sjrcpa

Level 15

Once you get all that info, check the US-UK income tax treaty, too.

The more I know the more I don’t know.

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