Situation: Wife is a US CItizen and daily commuter to the USA to Work. She is a Permanent Resident of Canada, and resides in Canada.
She withdrew a chunk of her 401K in 2009 to buy our house. Because the 401K was already taxed by the CRA in previous years, does she have to report this as foreign income? If the answer is yes, how does she do it, and how does she get the credit for all of the previous years she paid taxes on it?
She does have a 1099-R for the withdrawal and has reported it properly on her US return.
Thanks!
401K Hardship Withdrawal - Reporting
Moderator: Mark T Serbinski CA CPA
Only the 401(k) contributions that were added to her income are tax deductible now. according to the rulse I remember, she must use the non-deductible contribution first, that is, she will owe little in Canada.
As you can see, this means little tax credit in Canada, so her 401(k) is double taxed ,as is expected, and is why Cdn residents should not have contributed to 401(k) before the treaty fixed this.
This would have been on her 2009 Cdn return.
As you can see, this means little tax credit in Canada, so her 401(k) is double taxed ,as is expected, and is why Cdn residents should not have contributed to 401(k) before the treaty fixed this.
This would have been on her 2009 Cdn return.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best