CPP and OAS

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rallo
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CPP and OAS

Post by rallo » Sun Mar 17, 2019 7:49 pm

I am a dual citizen (US and Canadian) living in the US, retired and receiving Social Security as well as CPP and OAS. Where have others in a similar position been reporting their CPP and OAS benefits on the US Income Tax form 1040 ? With regular security befits which only allows one amount in Box 5 of SSA-1099 or otherwise. Thanks.

MaggieA
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Re: CPP and OAS

Post by MaggieA » Sun Mar 24, 2019 1:22 am

Replying to boost this above the spam and because I have a similar question.

1. rallo (OP) is a US resident dual citizen wanting to know where to enter CPP and OAS on the 1040.

2. Spouse and I are Canadian resident dual citizens and he has CPP. Same question - where to put this on the 1040, first to declare it and then to deduct it.

All the references I find by searching suggest 1040 line 21 and enter "foreign pension". For 2018, 1040 has changed a lot. Looks like line 21 has moved to Schedule 1. Is that right?

Secondly, where is the CPP amount deducted, because it's not taxable by US?

nelsona
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Re: CPP and OAS

Post by nelsona » Sun Mar 24, 2019 8:58 am

CPP and OAS income is treated like SS, and like all SS, goes on the line for SS. That line has a gross and taxable amount. If you live in Canada, don't include the non-taxable amount in the taxable amount.
Pension income goes on the pension line, not on some other income line.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

MaggieA
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Re: CPP and OAS

Post by MaggieA » Sun Mar 24, 2019 12:26 pm

Your answers always reveal the straightforward and logical path through the jungle of frustration. Thank-you.

rallo
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Re: CPP and OAS

Post by rallo » Fri Apr 05, 2019 10:21 pm

Thanks for clarifying this issue Nelson. How about foreign pensions which are issued on the form NR4. The equivalent form in the US (1099-R) asks for the EIN number of the payer but the NR4 does not have an equivalent EIN number resulting in rejection of the 1099-R by the software. (Taxact ). How do others faced with this dilemma solve this issue.

Gilgamesh
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Re: CPP and OAS

Post by Gilgamesh » Fri Apr 05, 2019 10:57 pm

Wow you can get SS, CPP and OAS...and that too as a USA resident?

Sry to hijack, but I didn’t know this was possible at all.

I’ve searched here, but can’t find anything...where can I learn more about it - specifically how CPP and SS interact? My wife had about 10 years of employment in Canada making more than $4k/yr as a student and a few years, well more than that. This is exciting!

We are dual citizens...I only held some summer jobs in Canada as a student, doubt I’ll qualify for CPP...

I want to learn about how to apply for both CPP and SS

MaggieA
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Re: CPP and OAS

Post by MaggieA » Sun Apr 07, 2019 8:54 pm

Re entering CPP on the 1040 SS line then putting taxable amount as zero, I cannot find a way to make TurboTax allow me to do that. Am tempted to just leave husband's CPP off our 1040 since it's not taxable anyway. How do others do this? Figure we can't be the only Canadian resident, US citizen receiving CPP and using TurboTax to prepare US taxes.

rallo
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Joined: Wed Feb 07, 2018 12:55 am

Re: CPP and OAS

Post by rallo » Sun Apr 07, 2019 10:24 pm

I use the software Taxact and have no problem adding the CPP to the SS line. Ijustadd it as a lump sum. I dont know why TT would reject your entry because SS is also non taxable unless you are making above a certain threshold when the IRS can then tax it at between 50 and 85%.

MaggieA
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Re: CPP and OAS

Post by MaggieA » Mon Apr 08, 2019 8:54 am

TT doesn't reject it. It just assigns it taxable income because it's a joint return and presumably I make above the threshold. However unless i'm misunderstanding, CPP paid to a Canadian resident US citizen isn't supposed to be taxed by the US, period.

nelsona
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Re: CPP and OAS

Post by nelsona » Mon Apr 08, 2019 11:26 am

You may have to fake a 1099-SSA to get it in as non-taxable. But it is non-taxable in US as you say.

If you do leave it off, then an 8833 would be appropriate.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

rafa02
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Re: CPP and OAS

Post by rafa02 » Mon Apr 08, 2019 1:35 pm

It does not help MaggieA, but as a point of interest, TaxAct now includes an option to claim treaty benefits RE Social Benefits for a number of countries, including Canada. Hopefully other software companies will include this in the future, and even expand to include SE tax.

rallo
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Joined: Wed Feb 07, 2018 12:55 am

Re: CPP and OAS

Post by rallo » Tue Apr 09, 2019 11:34 pm

The CPP Pension as well as US Social Security is non taxable only if your combined earnings is below a certain threshold. The tax software automatically determines individual thresholds based on total income as well as filing status (single, married filing jointly, etc). If your threshold is exceeded then 50-85% of the total lump sum of SS and CPP is taxed and included in taxable income. For instance lets say your CPP is $5000 and SS was $10,000 and your total income exceeded your threshold- Then your taxable income could be increased by a minimum of $7500 (50% of $15,000) and a maximum of $12,750 (85% of $15,000) . If you dont exceed your threshold then you pay no tax on either CPP or SS. There is not a way (that I am aware of) of separating CPP and SS so that they are taxed separately rather than as lump sum.

nelsona
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Re: CPP and OAS

Post by nelsona » Wed Apr 10, 2019 10:13 am

If you are not supposed to be paying US tax on CPP, then it is because you are living in Canada, and should not be paying US tax on SS either!

So there is no point or need to "separate" the 2 incomes. ALL of that line is non-taxable.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
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Re: CPP and OAS

Post by nelsona » Wed Apr 10, 2019 12:20 pm

And the treaty states quite clearly at XVII.5(b) that CPP and OAS received by US residents be treated "as though it were a benefit under the Social Security Act".

So it IS supposed to be lumped in with SS and taxed accordingly in US.

And if you are Cdn resident, then, of course, NONE of it is taxed in US, regardless of income thresholds, etc.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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