Canadian living in USA with only Canadian income

Blacksmoke · Post by **Blacksmoke** » Tue Feb 12, 2013 1:31 am

I am a dual citizen of USA & Canada living in the USA. I only have Canadian
pension income - union, CPP & OAS. For the last 7 yrs. since moving back to the country of my birth ( USA ) I have filed returns in both countries. But I was allowed to divide my income by subjecting the Can. pensions to the IRS and my union pension to the CRA. This meant that I would get all of my withholding tax back from union pension. However for the 2011 tax year the CRA have disallowed me to do this and are keeping $900 and they are saying that I have to declare all of my income in Canada. Can they do this?

nelsona · Post by **nelsona** » Tue Feb 12, 2013 6:45 am

Of couse!!
Submitting a tax return in either US or canada means reporting ALL world income, not splitting it up into 2 smaller piles.

If you live in US, then your Cdn union pension should only be taxed at 15% by canada, flat withheld at source. That is it for Canad, no othr tax, no tax report.

Then, in US you report tghe i[ernsion, CPP, OAS, and all your other income on 1040, and calculate the tax. The 15% withheld by Canada on your pension becomes a credit on your US return.