QUESTION:
Hi! I just retired from my company at Asia branch and moved to Canada as a
permanent resident. I received the pension from US head office for my
retirement after immigrating to Canada. I've never worked in US and also not
a US citizen. Do I have tax liability in US? How much should I report the
pension in Canada? Thanks for your answers.
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non-resident income tax expert - David Ingram 's CE-NTA Services in North
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david ingram replies:
Morally and legally, you should not have any tax liability to the USA.
However, the payer of the pension may want to deduct 15% of the payment to
you as a non-resident withholding tax. If they do, I can imagine you would
spend months fighting them.
Easier is likely to just accept the withholding tax and claim it as a credit
on your Canadian Return.
When you get the money, convert it to Canadian Dollars and report it on line
115 of your Canadian return. Claim the $1,000 pension income deduction on
your Canadian Return.
Last but not least, the pension may not even be taxable. If you earned it
off shore and it was never used as a deduction in any country and you worked
in a country that did not have a treaty with Canada, it may qualify as a
savings account and only the interest portion would be taxable.
Do any others on this list have an opinion. I would have to see the details
of the pension to give a better answer.
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