Reporting Foreign Pension from Belgium on US tax returns - double taxation question

Yes, your mom needs to report the Belgian pension on her US tax return, even though there's a tax treaty in place. All worldwide income must be reported to the IRS regardless of where it comes from. The good news is the US-Belgium tax treaty helps prevent double taxation. In TurboTax, you'll want to report the pension income and then claim a Foreign Tax Credit (Form 1116) for taxes already paid to Belgium. This way, she'll get credit for those Belgian taxes against what she might owe the US. Make sure she has documentation showing the pension amount and the taxes paid to Belgium. In TurboTax, when you enter foreign income, it should guide you through claiming the foreign tax credit. You might need to enter the income as "Other Foreign Income" depending on how TurboTax categorizes it.

I went through this exact situation with my aunt's Belgian pension last year! After hours of research and frustration, I found taxr.ai (https://taxr.ai) which literally saved my sanity. Their AI analyzed her Belgian pension statements and tax documents, then told us exactly how to report it and claim the foreign tax credit. It even highlighted the specific treaty provisions that applied to her situation and generated the exact form entries we needed for TurboTax. Much easier than trying to interpret the treaty language ourselves or waiting weeks for an international tax specialist.

Just wanted to update everyone - I tried taxr.ai after seeing the recommendation here, and it was incredibly helpful! My mom's "rust pensioen" was correctly identified as the Belgian equivalent of social security retirement benefits, which has special treatment under Article 17 of the treaty. The system even showed us the correct treaty article and explained that while we needed to report the income on her tax return, we could claim both the foreign tax credit AND a partial treaty-based exclusion. It saved us over $2,300 in taxes that TurboTax would have incorrectly calculated without this information. The documentation it generated for our records was super thorough too.

Another huge issue with foreign pensions is actually getting through to someone at the IRS who understands international tax treaties if you have questions. I spent 4+ hours on hold last year trying to confirm how to handle my wife's Belgian pension. After getting disconnected twice, I tried https://claimyr.com (there's a demo at https://youtu.be/_kiP6q8DX5c) which got me connected to an IRS agent in about 25 minutes. The agent confirmed that we needed to report the pension but could take the foreign tax credit, and also explained how to handle the currency conversion properly.

I need to eat my words from earlier. After struggling for THREE DAYS trying to get through to the IRS about my parents' German pension situation, I broke down and tried Claimyr. Got a call back in about 40 minutes connecting me to an actual IRS representative who specialized in international tax issues. The agent walked me through exactly how to report the pension and apply the US-Germany tax treaty provisions correctly. She even emailed me the specific IRS publications that addressed our situation. Totally worth it for the time saved and peace of mind that we're doing it correctly. Apparently there are some special forms needed beyond just the 1116 that I would have completely missed.

One thing nobody mentioned yet - the currency conversion can be tricky. My father-in-law's French pension had to be converted from euros to dollars for US tax reporting. The IRS wants you to use the yearly average exchange rate for pension payments (not the rate on the day received). You can find these rates on the IRS website or just Google "IRS yearly average exchange rate euro 2023" or whatever year you're filing for. This makes a big difference with how exchange rates fluctuated recently!

Has anyone successfully claimed the Foreign Tax Credit for Belgian taxes? I keep getting confused because some of the pension is taxed by their social security system and some by their regular tax system. Not sure if both count for the credit.

Great thread everyone! I'm dealing with a similar situation with my grandmother's Belgian pension. One thing I learned from our tax preparer is that you should also check if your state has any specific rules about foreign pension income. Some states don't tax foreign pensions at all, while others follow federal treatment. In our case, we're in a state that doesn't tax retirement income, so even though we had to report it federally and deal with the treaty provisions, there was no additional state tax burden. Also, make sure to keep copies of ALL the Belgian tax documents - not just the pension statements but also any tax certificates showing what was withheld. The IRS may ask for these if they have questions about your Foreign Tax Credit claim. Better to have everything organized upfront than scramble later!