Pension income sourcing

[A tax man]

- US resident, receiving both RRIF distributions (15% withholding tax at source), CPP and OAS
- US Federal average tax rate is less than 15%, so want to maximize the use of the Canadian withhodling tax on RRIF distributions

Question: Are CPP and OAS income considered non-US source income for US tax purposes?

General rules would suggest yes, they are US source, since pension income is source based on location of services that were provided

But

Canada-US Treaty article 18, para 5 suggests that CPP and OAS are taxed under US Social SEcurity law, which suggests US source maybe?


I would prefer non-US source treatment as it maximizes the foreign tax credit

thoughts?

[A tax man]

sorry, poor typing.

Line should read "general rules suggest yes, the are NON-US source"

[steveh]

I'm quite sure that CPP and OAS are treated in the same manner as US social security for US tax purposes, which means you enter them on 1040 by adding them to your US social security amount (if you have any). See this link http://www.irs.gov/faqs/faq/0,,id=199667,00.html