Canadian company pension distribution

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nikky87
Posts: 2
Joined: Mon Apr 01, 2019 6:32 pm

Canadian company pension distribution

Post by nikky87 » Mon Apr 01, 2019 6:48 pm

Hello,

My husband who is a Canadian Citizen but now a US resident as of 2016 took a lump sum distribution from his former employer's (Bell Canada) pension plan. I know the distribution was already taxed 25% in Canada and that we can claim the Foreign Tax Credit on the US taxes.

My question now is when we report the full distribution in our taxes this year, is the full amount subject to US taxes? I understand that for the RRSP account the taxable portion is only the difference between the time he moved here and the time the account was closed. Is a company pension plan similar or should I report the same full distribution amount in both 4a and 4b on Form 1040?

Thank you

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Canadian company pension distribution

Post by nelsona » Mon Apr 01, 2019 7:01 pm

Yes, pension income (and LIRA income) is fully taxable in US (and state). Hopefully a lot of his 25% tax will be used up as credit, but not typically.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nikky87
Posts: 2
Joined: Mon Apr 01, 2019 6:32 pm

Re: Canadian company pension distribution

Post by nikky87 » Tue Apr 02, 2019 1:10 pm

Thank you, appreciate the quick response!

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