CPP and OAS for US resident

[maddiewonders]

The treatment of CPP and OAS and whether it counts as general category FSI or if it should be treated as domestic US income like Social Security.

Per treaty it should not be construed as foreign because of Treaty Article XVIII(5)(b), which states:
(b) a benefit under the social security legislation in Canada paid to a resident of the United States shall be taxable in the United States as though it were a benefit under the Social Security Act, except that a type of benefit that is not subject to Canadian tax when paid to residents of Canada shall be exempt from United States tax.

The concern is that the Treaty says that CPP & OAS should be treated as though it were US Social Security, which implies that it would not be foreign source for a US resident. Is the understanding correct?

Summary: whether CPP and OAS received by a US resident be treated as "foreign source income" for F1116?

Thanks for the help!

[nelsona]

It is foreign source income, and can be included on a 1116. How it is taxed does not mean it is not foreign.

Of course, unless you have other Cdn tax on general limitation income (from this year or a pervious one) it really doesn't matter.