Someone please help me RRSP room calculation regarding to 401 (k) deduction

[nelsona]

and just so you will be aware, if you put money in your personal RRSP, you can't deduct that in US, nor can you deduct IRA contributions on yoru Cdn return either.

And remember not to put any money in your Roth401(K) or any other Roth, or the internal income is taxable.

So, the problem of no RRSP room is a universal one, involving ALL Cdn workers.

[PlatinumNeon]

Could I claim this CDN tax on the 401a contribution as a foreign credit in the US next year?

[nelsona]

No, but you can claim ALL the Cdn tax you PAY in the calendar year (and is not refunded to you) as a deduction on Schedule A.
You can only claim FTC in US on foreign-source INCOME, and some US INCOME which Canada does not give FTC against. US bank interest, cap gains, etc.

That is re-sourced by treaty,
You have lots of aspects of cross-border tax that you are unfamiliar with, so I wouldn't spend too much time on a closed issue that will go away next year.

Keep browsing the forum.

[PlatinumNeon]

Interesting. So how would that work given that I filed US taxes first so I could file the CDN ones after (and claim foreign credits). Would I have to amend my US return? Are there any timelines involved or is it too late now?

[nelsona]

There is no "order" to filing cross-border taxes. one prepares BOTH together, without consideration for FTC, and then applies FTC as appropriate to BOTH returns ONCE, and then files both when they are BOTH complete.

Pay no attention to filing deadlines, esp. if you do not owe money. take the time to have them done correctly. Adjust your withholding on your wages so that you won't be so eager to get back a big US refund by filing early, and maybe start paying CRA a quarterly installment to avoid a big bill at year end.

1040's can be amended for 3 years. Cdn returns can be mended indefinitely.

Keep browsing, and come back with more questions in June/July.

[PlatinumNeon]

So could I wait for 4 years in Canada (and not file CCA claims) and if I know for sure before the end of the 5th year I'm moving back to the States, I could amend all my CDN returns and claim CCAs on them?

[nelsona]

yes. There may be a separate time limit on CCA, and you would also have to amend any US returns on which you claimed FTC.

[PlatinumNeon]

...even if the 1040s can be amended only for up to 3 years? (as per your previous answer)

[nelsona]

FTC, because it can be carried forward 10, years can be modified. particularly that you would now OWE money, they can go back 6 years.

[lipeter1]

Picking up from the OP, I just got off the phone with the CRA.

They said that the amount reported on line 207 (including your contribution to a 401k plan) is NOT factored into the RRSP Deduction Limit calculation.
On the other hand, the employer matching contribution (Box 5123/Line 206) DOES reduce your RRSP Deduction Limit.

Is what the CRA agent said correct?

[nirvana_1959]

@lipeter1:

Line 207 should only include your contribution to 401K and not the total which includes employer contribution. The tax software is doing what the CRA agent has said in this regard (i.e., this amount is used in the deduction but doesn't reduce the contribution room). My guess is this allows RRSP room to bring in your 401K contributions (you still have to pay US taxes on this).

The Prescribed Amount (employer contribution) is the amount that is used to reduce RRSP room.

Question:

401K with both employee and employer contributions: How to report this in the "Prescribed Amount" box of RC268 ? I am thinking 401K is not a defined benefit plan. It is a defined contribution plan (just like RRSP). So, the employer contribution goes into Line 2 of this box (If you participated only in a money purchase plan: Amount of employer contributions made on your behalf for 2018 ).

Thanks in advance!