Foreign Pension Plan FBAR Reporting

Foreign Pension Plan FBAR Reporting

FBAR Reporting Foreign Pension Plans

Reporting Foreign Pension Plans & FBAR: The FBAR is the Foreign Bank and Financial Account Reporting form. It is also referred to as FinCEN Form 114 and used by U.S. persons worldwide to report foreign bank and financial accounts to the IRS. When it comes to FinCEN Form 114, FBAR Foreign Plan Reporting is required.

Each year, when a U.S. person meets or exceeds the threshold requirements for reporting foreign accounts, the foreign pension is included on the form.

In recent years, the IRS has taken an aggressive position toward enforcement of foreign accounts compliance — and this includes foreign pensions.

It is important to note that the reporting requirements are not the same as the tax rules. A foreign pension is reportable, even in a year that it is not taxable in the U.S. Common international reporting forms, include FBAR, FATCA, Schedule B.

If a person is out of compliance, they may consider FBAR Amnesty, or one of the other voluntary disclosure programs.

We will summarize foreign pension plan FBAR reporting.

What type of Foreign Pension Plans are Reportable on FBAR?

The FBAR Foreign Pension Plan reporting rules are tough, primarily because Foreign Pension Plans come in all different flavors. In short, a foreign pension is an account. Therefore, the account must be reported.

This is true, even if the account was opened and earned prior to becoming a U.S. Person. It is also important to note that even if no distributions are being made, it still must be reported on the FBAR.

Some common examples:

  • Provident Fund
  • Superannuation
  • Employer-Based Retirement
  • Private Retirement
  • Foreign Social Security

When it comes to reporting foreign Pension Plans, there are 4 main issues:

  1. Should the Pension Plan be reported on an FBAR?
  2. Should the Pension Plan be reported on a Form 8938 FATCA Form?
  3. Should the Pension Plan be reported as a PFIC (Form 8938)?
  4. Should the income be reported as income, and if so, on Schedule B and/or, Line 16 or Line 21 on the 1040

FATCA & Foreign Pension (Form 8938)

The same general rules apply to FATCA Form 8938, and the foreign pension is generally reportable on the IRS 1040 Form 8938.

Schedule B

Even if you do not meet the threshold requirements for filing FBAR or FATCA, the foreign pension is still considered an “Account” for purposes of Schedule B.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure

Contact our firm today for assistance with getting compliant.