I am a resident alien that retired in August 2010 and left the USA in October.
I received a 1042-s reporting the foreign persons US source income.
Do I have to report this income on the 1040? If yes on what line would I report the gross income and federal tax withheld?

You report it as a pension distribution on Line 17a and 17b of Form 1040NR if you are filing a dual-status return and you received the distribution AFTER you left in October 2010.

If you received the distribution BEFORE you left, list it on the Form 1040 of the dual-status return.

Note that the dual-status return is NOT a return for amateurs; get professional help!

If you need professional help filing your return, email me at [email protected] or [email protected].