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Hi David,
We're Cdn citizens who have been in the US working under an HIB
for the past 3 years. Last year my husband turned 60 and the Cdn
Fed govt. superann. pension folks told him he couldn't defer
collecting this pension now that he's 60. So we have income from
Canada & the US now. His pension is considerably smaller than
his US salary.
1. From reading previous Centa newsletters and emails we assume
we'll need to declare the Cdn pension in our US Income tax forms
and we can apply the Cdn tax taken as a foreign tax credit,
correct?
2. What tax forms do we need to file in Canada?
3. Again from previous information on your site we are assuming
we won't need to declare the US salary on the Cdn tax form,
correct? We have no Cdn home or ties to Canada except our RRSPs.
Thanks for your assistance! Your website is terrific!!
J XXXXXXX
================================================
david ingram replies:
The Canadian Government will withhold 15% tax and that is all you
have to do for Canada. No tax return is necessary. He should
consider applying for his CPP at the same time. Without more
monies going into CPP, the amount reduces each year.
On your US return, you will report the gross amount of pension
(in US funds) on lines 17a and 17b and claim a foreign tax credit
on form 1116.
You might want to hire us or someone like us to do the first year
and copy after that.
Remember, you do need to report the internal earnings of your
Canadian RRSP's on Schedule B of your 1040 although you can
exempt it under the terms of REV.PROV 2003-23 which you can find
in the August 2003 newsletter at www.centa.com
You also need to file forms TDF-90 to repor the existence of the
RRSP accounts to the Dept of the Treasury.
http://www.irs.gov/pub/irs-fill/f9022-1.pdf
Failure to file the TDF-90 forms has a penalty of up to $500,000
plus 5 years in jail under US law.
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