IRA RMD taxation

[mfradkov]

I am Canadian tax resident and Canadian. No USA citizenship or green card.
I got first required minimum distribution (RMD) fro IRA . it is near $700 . No withholding tax.
I am sure I must report this money for CRA.

Must I report this money for IRS?

PS. recently I asked almost the same question about SS benefits. The answer was - I must report SS benefits for CRA only.


Thanks,


Michael

[nelsona]

Your IRA distribution is taxable in US, reported on a 1040NR. You can report it as "connected" income and determine the taxa, or you can take it as "non-connected" and pay 15% flat tax.

Most CDns advide there IRA mamanger that they are Cdns subject to 15%, and if it is properly withheld, then the 15% flat tax is all that is required, no tax return.

In any event, the full amount is also reported in Canad, with whatever tax determined in US taken as a foreign tax credit.

[mfradkov]

I have got already 1099-R for IRA distribution and SSA-1042S for SS benefits.

You told me I have to submit to IRS 1040NR report for IRA (1099-R) and I do not need to report IRS SS benefits -only Canadian tax report.

My question is : If I submit 104oNR for 1099-R should I include in the form SSA-1042S too?

[nelsona]

Only the IRA income is reported. there is space in the 1040NR to indicate any other income that is excluded by treaty.

[mfradkov]

I have found:
IRS Publication 597
Social security benefits. U.S. social security benefits paid to a resident of Canada are taxed in Canada as if they were benefits under the Canada Pension Plan, except that 15% of the amount of the benefit is exempt from Canadian tax

It looks as need to report in Schedule OI (1040 NR) ,L -Income Exempt from TAX, 1-Enter the name of the country,The application tax treaty article ....
The problem for me is "The application tax treaty article" for SS. Could you tell me if you know?

Thanks,


Michael.

[nelsona]

Article XVIII.5(a)

[mfradkov]

Thank you very much!

Article XVIII
5. Benefits under the social security legislation in a Contracting State paid to a resident of the other Contracting State shall be taxable as follows: (a) Such benefits shall be taxable only in that other State;

It looks, as I have finished with my 1040NR.

Thanks again.

[mfradkov]

I have got form 1042-S from US bank (with huge $56 interest )
1 is 29 –deposit interest
3a is 01 –effectively connected income
No federal tax withheld

It looks as I must to put $56 to form 1040-NR in line 9a (taxable interest) and pay US tax.
Is it correct?
What do you think?

[nelsona]

Sounds fine. You should not owe any tax.