Hi all.
My wife took 8K out of her RRSP last fall and now I want to get back the 25% tax that she paid (she had zero world income last year).
This appears to be the 217 form: http://www.cra-arc.gc.ca/E/pbg/tf/5013- ... sc-05e.pdf, however, am I right that I also have to file the general T1 for non-residents: http://www.cra-arc.gc.ca/E/pbg/tf/5013-r/5013-r.pdf as well as schedule A: http://www.cra-arc.gc.ca/E/pbg/tf/5013- ... sa-05e.pdf? Anyone know off-hand if I'll need to fill out anything else?
(We've both been in the US since 1998 and have had no ties with Canada since we left Canada.)
ETA
How to file 217 election?
Moderator: Mark T Serbinski CA CPA
There is a guide designed specifically for filing 217.
http://www.cra-arc.gc.ca/E/pub/tg/t4145/t4145-05e.pdf
follow this and the non-res guide and you will have no problem.
Remember that you absolutely MUST file a 217 return by June 30th in order to be allowed to recoup anything. if it's late, you are left with the 25% as final tax.
You should be looking into filing an NR5 every year --before taking a withdrawal -- to reduce the withholding and then have less to wait for 6 months later.
Just a tip too: it is unlikely that your spouse as NO US income, she probably has a joint account with you -- some of which is her interest, no?
http://www.cra-arc.gc.ca/E/pub/tg/t4145/t4145-05e.pdf
follow this and the non-res guide and you will have no problem.
Remember that you absolutely MUST file a 217 return by June 30th in order to be allowed to recoup anything. if it's late, you are left with the 25% as final tax.
You should be looking into filing an NR5 every year --before taking a withdrawal -- to reduce the withholding and then have less to wait for 6 months later.
Just a tip too: it is unlikely that your spouse as NO US income, she probably has a joint account with you -- some of which is her interest, no?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Great reply as always Nelson.
How much does filing an NR5 help? It sounds like this can't eliminate all withholding (or the 217 would be unnecessary). For someone with practically no world income, what would the withholding be reduced to (from 25%)?
And you're 100% correct on the interest income -- that never even crossed my mind earlier (hopefully actually filling in the form would have jogged my memory but you never know...).
Thanks!
How much does filing an NR5 help? It sounds like this can't eliminate all withholding (or the 217 would be unnecessary). For someone with practically no world income, what would the withholding be reduced to (from 25%)?
And you're 100% correct on the interest income -- that never even crossed my mind earlier (hopefully actually filling in the form would have jogged my memory but you never know...).
Thanks!
The NR5 gets you most of your money sooner.
On an $8K yearly withdrawal CRA may ask for 1% to be withheld. Of course if you implement my strategy of withdrawing more than $8K (by using, for example, the working spouse's medical premiums), you can usually withdraw $10-12K tax-free, and they will ask for 4-6% to be withheld.
If you submit an NR5, then you MUST also submit a 217 at year-end, or on July 1st CRA will come back at you for the unwithheld tax.
But I rather be waiting for a $200 cheque from CRA in June that a $3000 one.
On an $8K yearly withdrawal CRA may ask for 1% to be withheld. Of course if you implement my strategy of withdrawing more than $8K (by using, for example, the working spouse's medical premiums), you can usually withdraw $10-12K tax-free, and they will ask for 4-6% to be withheld.
If you submit an NR5, then you MUST also submit a 217 at year-end, or on July 1st CRA will come back at you for the unwithheld tax.
But I rather be waiting for a $200 cheque from CRA in June that a $3000 one.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Remember, the NR5 and the 217 are completely separate.
You could file an NR5 for a $8000 withdrawl, be told that 0% will be withheld, and then, because of, for example, unexpected income late in the year, the calculated NR tax is $2000 or more, then you wasted your time with the NR5 and 217 and should have just let the Normal NR withholding take place.
by the way, if you do the 217 (whether or not you had previous submitted an NR5 that had reduced withholding) and the tax ends up being more than 25%, you will be limited to 25% on that Cdn income.
Another strategy for extracting non-working spouse's RRSP at a higher yearly ammount than $8,000 is to try to 'match' the US tax that will be charged on her withdrawal.
If say, $2000 of her RRSP will be taxable in US (which would ba about $500 in tax), you might withdraw an extra $2000 in canada, which would yield about $500 in Cdn tax. this would get your spous's money out sooner.
You could file an NR5 for a $8000 withdrawl, be told that 0% will be withheld, and then, because of, for example, unexpected income late in the year, the calculated NR tax is $2000 or more, then you wasted your time with the NR5 and 217 and should have just let the Normal NR withholding take place.
by the way, if you do the 217 (whether or not you had previous submitted an NR5 that had reduced withholding) and the tax ends up being more than 25%, you will be limited to 25% on that Cdn income.
Another strategy for extracting non-working spouse's RRSP at a higher yearly ammount than $8,000 is to try to 'match' the US tax that will be charged on her withdrawal.
If say, $2000 of her RRSP will be taxable in US (which would ba about $500 in tax), you might withdraw an extra $2000 in canada, which would yield about $500 in Cdn tax. this would get your spous's money out sooner.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
We are Canadians living in the US on H1/H4. My wife is filing Cdn tax for 2005 under Section 217 for the first time to get back 25% withheld when she collapsed here $7500 RRSP. Special tax form for this purpose requires 'net world income of spouse to claim certain credits' on page 1. This is used for calculating tax credits. The question is, does she need to enter my US income here, even if she is not claiming any tax credits for me. Or, it can be just left blank. Thanks.
She should leave it blank.
Just be sure that she gets no spousal credit on Schedule 1 nor GST/CCTB eligibility.
I have been writing '0' for 3 years without problem, using ufile (it's free if she makes less than 20K.)
Just be sure that she gets no spousal credit on Schedule 1 nor GST/CCTB eligibility.
I have been writing '0' for 3 years without problem, using ufile (it's free if she makes less than 20K.)
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing