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Mr. Ingram,
The quote below seems to fit my situation.
I am a US citizen, married to an employed Canadian, and I am a landed
resident in Quebec, Canada. Since taking my Social Security at age 62, and for the
past 6 years, I have paid quite a large tax bill in Canada, but my sole income
has been my Social security of approximately $600US per month. I get the
impression from the quote of your article, that I have been paying taxes in Canada
that maybe I should have had exemptions from!
[ Quote.......
Wed, 07 Jan 2004 07:41:21 -0800
Canada will always tax the full 85% of the pension. If you were still a
resident of the US, the IRS taxes "up to" 85% of the pension. In general, if your
income for the year is less than $25,000, you will not pay any tax to the US
on your Social Security. In Canada, in general, 85% becomes taxable although
if you were 66 and your sole income was a $1,000 a month (CDN) from Social
Security, your personal exemption amounts would be enough to wipe out any tax on
it.]
Help!!!!!
Thank You,
RXXXXXXX
==========================================================
david ingram replies:
I am not going to go back and redo your returns but assuming that you are 68 now, you should not have paid any tax to Canada since the year you turned 65. You would have had something like $300 to $600 a year for the first three years but then your Old Age exemption amount would have been added to the $1,000 pension income amount and your total exemptions would be enough to wipe out $600 a month US.
If you have paid any tax in the last three years, you can still fix your Quebec and your federal returns.
If your federal returns have been wrong all the way back, you can change them all the way back by writing to the FAIRNESS COMMITTEE at your local tax office.
The US pension should be converted to Canadian Dollars and entered on line 115 of your return. Then you deduct 15% on line 256 of your return.
Therefore, if your $7,200 was converted to (for simplicity's sake) $10,000 Canadian on line 115, you would deduct $1,500 on line 256 and the taxable income would be $8,500 which has not been taxable to you since you turned 65.
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