Hi....I've learned a lot on this forum about my circumstance but I still have an outstanding question. I'm a US resident about to withdraw my Canadian RRSP and be subject to the 25% withdrawal tax. I understand that I have to pay US taxes on the amount that the RRSP has grown (over the cost base) since I moved to the US (5 years ago). But, my question is:
IS the 25% tax that is withheld in Canada only a foreign tax credit on my US return against the growth of the RRSP (i.e., the added foreign income)? Or, can the 25% withheld tax be used to offset my US income?
Any help would be very much appreciated. Thanks!
Reporting RRSP non-resident tax on US return
Moderator: Mark T Serbinski CA CPA
The 25% Cdn tax is only to be used as a credit against the US tax you pay on taxable portion of the RRSP (as calculated on form 1116), so it is typically quite a small ammount, unless you are in a very high tax bracket and you had exceptional growth in your RRSP.
You can conversely, use the tax as a deduction on your schedule A for the year.
Do it both ways and see which is bestter.
You can conversely, use the tax as a deduction on your schedule A for the year.
Do it both ways and see which is bestter.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 