US citizen, worked in Canada 33 yrs, withdrew RRSP funds

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Starsky
Posts: 2
Joined: Sun Jan 31, 2021 5:59 pm

US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by Starsky »

hello
I'm a US ciitzen getting ready to file 2020 taxes. Worked in Canada for 33 yrs as a permanent resident. I am no longer a resident. Not sure how to report RRSP withdrawal NR4. Have not contributed to the fund for 8+ yrs. I'm now 61

Jan 2020 withdrew in CDN 59971.75 paid CDN tax of 14992.94 (25%)

at 1.300 exchange rate these numbers would be 41980.23 US and US value of CDN tax paid 10495.06 (25%)

Where to I report this receipt of these investment funds and I shouldn't have to pay additional US tax of this money should I.

I've had no other income CDN or US for the year 2020 and am trying to do my own taxes.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by nelsona »

A good portion of your RRSP may be tax-free in US, IF you kept good records of how much you deposited INTO the RRSP over the years, which were not tax deductible on your US return. Is this RRSP a work RRSP?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Starsky
Posts: 2
Joined: Sun Jan 31, 2021 5:59 pm

Re: US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by Starsky »

The original contributions were for a period over 20+ working years, so I do not have any records. Back then I did not file US tax returns, but only CDN tax returns every year. Again, I lived there over 33 years.

Just need to know how to report this RRSP withdrawal now on my US tax return?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by nelsona »

That is what I'm trying to help you with.

Since you have no records, you will report the gross amount on the pension line, and the taxable portion will be the same as gross. Use the 25% Cdn tax as a credit on form 1116, general limitation income. If you hade records of your contributions over the years, you could reduce the taxable portion by those contributions.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Dencan
Posts: 1
Joined: Wed Feb 03, 2021 9:18 pm

Re: US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by Dencan »

Similar situation. I am a dual citizen (CDN, US) and was in Canada before moving to the US. All my contributions to RRSP were made when I was in Canada. Since moving to the US I have not contributed to the RRSP account but I have been submitting FBAR every year. I am planning to withdraw the funds in one go now.
Question1: If I have my contribution details (from 20+ years ago) does it mean I pay tax only on the growth of funds and not on the total withdrawal?
Question2: Is there a minimum age before I can withdraw without penalty (like 59.5 yrs for 401K etc in the US)

Thanks for your help
Bubba Gums
Posts: 54
Joined: Tue Jul 15, 2014 7:20 am

Re: US citizen, worked in Canada 33 yrs, withdrew RRSP funds

Post by Bubba Gums »

1) In Canada you will pay tax on the whole amount. 25% if you take it as a lump sum, 15% if you convert it to a series of similar payments e.g. RRIF. 1a) In the US you will include amounts in your income above your your US tax basis (investment in Contract). Your basis is determined by how much of your RRSP contributions you previously declared as income in the US.

e.g. In 19XX I contributed $2,567 to a Canadian RRSP. This contributions is included in my US taxable income, however, I am deferring taxation on the gains in accordance with the US-Canada Tax treaty and IRS Rev. Proc. 2014-55. Below I summarize the contributions and earnings to determine the investment portion under IRC § 72(c)(1)(A).

2) There is no minimum age for RRSP withdrawals. There are age factors for RRIF withdrawals.
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