Canada Pension

Forum|Forum|5 years ago
June 8, 2021
3 replies
18 views

Client is US Citizen. Worked in Canada some 20 years ago. In 2020 client decided to collect Canada University Pension Fund and some bank pension accounts. Canada deducted 25% of course.

Does client report this as US income and take a FTC? Or is the income sheltered by the treaty? I have reviewed the Canada/US Tax Treaty and frankly it confuses the heck out of me.

Any help is appreciated.

Best to all as we navigate daily changing IRS tax reporting rules!

PS - I have a high net worth client who filed a 2019 return in June 2020, requesting a refund of well overpaid ES Taxes, IRS is holding the refund while the return is "in process", we cannot contact IRS by phone. Client does not need the money fortunately, but God after 40 years in the tax preparation business I have never seen anything like this. Its a bit unsettling to say the least.

Lacerte Tax

This topic has been closed for replies.

Best answer by BobKamman

Tax treaties generally reduce the U.S. taxes of residents of foreign countries as determined under the applicable treaties. With certain exceptions, they do not reduce the U.S. taxes of U.S. citizens or U.S. treaty residents. U.S. citizens and U.S. treaty residents are subject to U.S. income tax on their worldwide income. So report it as income and claim FTC (although this might require filing a Canadian return, because the tax withheld may not be tax owed).

IRS in its latest update said they have only 19,000 returns from 2019 left in the processing pipeline. I don't believe them.

George4Tacks

Level 15

https://proconnect.intuit.com/community/federal-taxes/help/how-do-i-report-a-canadian-pension-nr-4-in-lacerte/00/3411

Answers are easy. Questions are hard!

S

Szyper

Level 2

federal 911 streamlined filing

sjrcpa

Level 15

@Szyper

Start a new question instead of tacking onto an old, unrelated one.

And use more words.

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

George4Tacks

Level 15

Are we having fun yet?

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/canada-form-nr4/00/53097 look at the statement by @itonewbie

Answers are easy. Questions are hard!

BobKammanAnswer

Level 15

Tax treaties generally reduce the U.S. taxes of residents of foreign countries as determined under the applicable treaties. With certain exceptions, they do not reduce the U.S. taxes of U.S. citizens or U.S. treaty residents. U.S. citizens and U.S. treaty residents are subject to U.S. income tax on their worldwide income. So report it as income and claim FTC (although this might require filing a Canadian return, because the tax withheld may not be tax owed).

IRS in its latest update said they have only 19,000 returns from 2019 left in the processing pipeline. I don't believe them.

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