Child to File?

ldmone · Post by **ldmone** » Wed Mar 29, 2006 7:20 pm

My 14 year old stepson has lived in the USA for 6 years. He receives a Pension from the Canadian Government (Survivor Benefit Pension). He has accumulated just over $10K USD in a Canadian bank. He earned about $100 USD interest in 2005. What if any filing should I be doing for him.

..... 1040 ?
..... TD F 90-22.1 ?
..... Rev. Proc. 2002-23 ?

Thanks

nelsona · Post by **nelsona** » Wed Mar 29, 2006 11:55 pm

I would need more details about this 'pension'. It sounds more like CPP benefit.

His pension is taxable in US, as is any interest. He should be reporting it. It is treated like SS

Because he has a bank account, that account should be included on a TD F 90-22.1.

Is the interst being tax withheld. it should for a US resident.

The Rev Proc does not apply.

ldmone · Post by **ldmone** » Thu Mar 30, 2006 5:08 pm

Yes it is a CPP benefit. The income amount this year was $2010 USD and non-resident tax was withheld on the bank account.

Where should I put the amounts in the 1040?

nelsona · Post by **nelsona** » Thu Mar 30, 2006 6:33 pm

The amount should be reported on HIS 1040, line 20. The interest appears on line 8 and on Schedule B.

The tax cabn be used on form 1116, but he probably (a) does not have sufficnet tax in US, nor have sufficient 10% tax in canada to ammount to any credit on his 1116. He could itemize. There are spoecial rules for minors filing a 1040 as to what their standard deduction is. his income may also affect your return, but I doubt it.

Just to verify, he should not be having any Cdn tax withheld on his CPP benefit as this is not taxable by canada for US residents, by treaty.

Only his bank interest is taxable in canada, at flat 10%. he has no report to make there.

ldmone · Post by **ldmone** » Thu Apr 13, 2006 9:05 pm

Thanks ... your help on this and many other Canada/US tax issues has been extremely valuable over the past few years.