Defined Benefit Non Contributory Pension Plan Payments

[Danielle105]

In tax year 2024 I started receiving payments from the pension plan. I have received an NR4 form, showing Income Code 39 (Superannuation or pension benefits - Periodic Payments). It also shows exemption code T for treaty. The non-resident tax withheld is 15%. The form includes a non-resident account number with an "NRJ" prefix. This pension is not adjusted for inflation. This is a life only pension with no death benefit. To initiate payments my former employer had me contact a pension consultant who arranged to have payments come from an insurance company.

The amount received is more than $10,000 USD. My total income from Canadian sources is well under $50,000 USD.

I am trying to determine how to proceed with related USA tax filing and forms.

To electronically file I understand I should enter the income on Schedule 1, Part I, line z Other Income.
For form 1116, I understand this should categorized as d. General Category Income. Can you verify the category?

The terminology used in the questions 7a, 7b, and 8 on schedule B, Part III is not clear to me. CPP, OAS and this pension are they only foreign sources of income I have. Based on the information I have provided here, what are the correct responses for those Part III questions?

Should I file an FBAR for this pension?

I understand FATCA 8938 is not required as I am under the $50,000 USD filing threshold.

Should forms 3520 / 3520A be filed? If required are there any suggestions how to proceed? I have not found an easy follow instruction that are specific to this situation.

[nelsona]

Your pension income goes on the pension line of 1040, not any other income line.
As you said the income is General for 1116 purposes. And althougn your CPP and OAS (which go on the social security line) are not taxed in canada, they are CDn-sourced, so can be included on your 1116 as well. Then you use the 15% tax you paid as foreign tax.

Let the software figure out the rest.

[Danielle105]

Thank you for your response.

Can you comment on the following items from the original post? I am not sure how to respond to the software questions pertaining to Schedule B, Part III. I am using the TurboTax Premiere Windows PC download product.

Noting the NR4 form shows Income Code 39 (Superannuation or pension benefits - Periodic Payments), is the correct response yes or no.

7a At any time during 2023, did you have a financial interest in or signature authority over a financial
account (such as a bank account, securities account, or brokerage account) located in a foreign
country? See instructions . .

8 During 2024, did you receive a distribution from, or were you the grantor of, or transferor to, a
foreign trust? If “Yes,” you may have to file Form 3520. See instructions . . . .

Please see questions below from original post re FBAR / 3520 / 3520A.


"
The terminology used in the questions 7a, 7b, and 8 on schedule B, Part III is not clear to me. CPP, OAS and this pension are they only foreign sources of income I have. Based on the information I have provided here, what are the correct responses for those Part III questions?

Should I file an FBAR for this pension?

I understand FATCA 8938 is not required as I am under the $50,000 USD filing threshold.

Should forms 3520 / 3520A be filed? If required are there any suggestions how to proceed? I have not found an easy follow instruction that are specific to this situation.
"

[nelsona]

CPP OAS and your pension are not accounts which you control. Do you have any BANK or INVESTMENT accounts? If not, the answer is no for FBAR. They are not considered trusts either.

Please do not ask for further answers to your questions. I read your post and answer accordingly.