IRA withdrawal

[moi]

I am a Canadian, living in Canada, with a US IRA.
Assuming my income is less than the basic personal exemption in Canada.
If I withdraw $10,000.00 from my US IRA, and the with holding tax has been collected. In reality, will I get to claim that tax money back from the Canadian gov't through the treaty?

[nelsona]

No, because you are not taxable in Canada due to low income. However, you would (and should) file a 1040NR, reporting the IRA on page one, and get most if not all your withholding back.

[Fug1]

If you're a non-resident, isn't an IRA withdrawal taxed at 15% in the USA?

[pl0910001]

Hello Nelsona, Just a question regarding

[pl0910001]

Let's try this again. Nelsona, you state to fill out a non resident tax return for US taxes in order to get some of the witholding refunded. My question is, on this return , are you required to put canada sourced income? I am a canadian citizen living in Canada with an IRA and RRSP. What is the best withdrawal strategy in order to ensure that i get full credit for foreign taxes paid? Is it better to withdraw from only one or both each year? Am I better off draining the RRSP first as the minimum withdrawals in the IRA appear to be lower than those in the RRSP. Some help in a withdrawal strategy would be appreciated. Many Thanks.

[nelsona]

1040NR by definition only includes US source income. So your RRSP withdrawal means nothing to US. The best way to get full credit on your Cdn return for US taxes paid on your IRA is to reduce the US tax by reporting the income on a 1040NR rather than simply accepting the withholding done by the IRA manager.

[moi]

Thank you, Nelsona.
Once I have withdrawn money from my IRA, filed my 1040nr, hopefully re-cooped some of the 15% paid...
Now do I file a Canadian return? Or am I done?
Regards.

[nelsona]

Of course you must file a CDn return and report all the income. Whatever tax you finally paid in US will be used in Canada against your Cdn taxes on that income, if any,