US Resident RRIF/LIF withdrawals

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artistic95
Posts: 27
Joined: Wed Sep 26, 2012 12:27 pm
Location: Lake Wales, Florida,33859

US Resident RRIF/LIF withdrawals

Post by artistic95 »

I am a US/Cdn. citizen, age 74, retired and living in US and no longer filing Cdn. tax returns. I am withdrawing my minimum required amounts on a monthly basis from my RRIF and LIF and have a 15% tax withheld at source. My withdrawals, my major source of income, are being partially reported as income om my US tax returns.

With the reduction change this year in the required minimum withdrawals, was there any change for Non residents in tax withholding requirements?
Is it still 15% ?
Can I withdraw more than my minimum on a monthly basis and still maintain a 15% tax withheld?
Due to the reduction in minimum withdrawals and decline in Cdn $, I may have to take out more than minimum required by regulations to live.
What would cause an increase in tax withheld at source (25%) which I would want to avoid?
Thanks, Artistic95
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

I'll answer this thread as the other is almost identical, but less info.

As long as you take no more than 10% or twice your required amount, per year, so will only be taxed 15% flat by CRA.

Changes to the withdrawal schedule have no impact on this (other than the determination of twice the minimum).

So you are able to take out a good amount more and still be taxed at 15%. The withdrawals do not have to be mobthly. You could take a lump sum whenever you wish during the year.

Your other question about putting money back is best asked of the RRIF manager. I'm sure CRA put measures in place to account for this. I would be leery of trying this as a non-resident, since you are not filing a return.

Whane you say that you RRIF and LIF incomes are being "partially" reported, I trust you are referring to the RRIF portion. Your LIF payemnts are 100% taxable in US. Your RRIF payments are partially taxable based on the value your original RRIF or RRSP had when you moved to US.

Also, have you looked into filing a 217 return in Canada to prhaps reduce the tax on your pension to lower than 15%. I would look into this if you are regularly left with carryforward of your Cdn tax on form 1116. It would depend how much other income you have from US as compared to your RRIF/LIF/CPP and OAS from Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
artistic95
Posts: 27
Joined: Wed Sep 26, 2012 12:27 pm
Location: Lake Wales, Florida,33859

Post by artistic95 »

Nelsona, thanks for your response!! With regards to your comment on "other income you have from US etc" is that joint income tax filing income including US social security, wife's income etc>
Thanks again,
Thanks, Artistic95
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No. That is the beauty of the 217 election., It includes none of her income (you can't claim her as a dependant of ocurse), but it includes all her medical expenses, etc.

If you are using up your 15% (like I said, be sure you are correctly reporting the taxable portion of your RRIF and all of your LIF.) then don't bother, since the rate is 23% after deductions, but if your world income is low, and mostly Cdn sourced, then you should ytake a look.

Also, what many in your position forget, is that although your CPP and OAS are only taxed in US, they are still considered Cdn sourced. So when you are using 1116 to figure out your tax credit, remember to include your RRIF, LIF AND CPP/OAS as foreign income. this will help you use up any Cdn foreign tax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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