Withholding on US Pension

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MaggieA
Posts: 150
Joined: Sun Oct 31, 2004 4:06 pm

Withholding on US Pension

Post by MaggieA »

We are Canadian and US dual citizens, resident in Canada. Husband is now filling out the paperwork to start his pension from US employer. This shouldn't be subject to US withholding at all, because under the treaty it is taxed by Canada, not US. However, according to form W4-P and Pub 505, it appears that unless he provides a US home address, it will be automatically subject to 30% withholding. That seems pretty steep. I suppose it will be refunded, eventually, when we file 1040, but I'd like to avoid this withholding. Is there a way to accomplish this?
nelsona
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Re: Withholding on US Pension

Post by nelsona »

US pensions are indeed taxable in US first. Where dud you get that idea that they were not ? Only social securuty is not taxed in US for Cdn residents.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Re: Withholding on US Pension

Post by nelsona »

And the employer is correct that for foreign addresses withholding cannot be waived
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Re: Withholding on US Pension

Post by nelsona »

When you file 1040 you will report the pension along with all your other income and calculate the tax. You will ger some of it back
Then you report the pension in Canada and use the US tax as credit
Now you may be successful in having the withholding reduced to 15% or 20% if he is over 55 yrs old, but the pension is subject to withholding and tax in US
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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