Roth distribution filing irs and cra

[brianbbc]

I understand that the cra does not require filing in the T1 for tfsa distribution. What about cdn citizen/resident receiving roth distribution? Assuming no early withdrawal penalties and w8ben on file with the custodian, does a 1040 need to be filed with the IRS or reported on T1 with cra for roth distributions.

[nelsona]

If you are filing a 1040 it would be including in gross pension income, but not net, a 1099 would be issued. If you are a non-citizen, non-resident, one would not need to file a 1040NR if there is no tax to be paid/refunded.

For CRA, your gross Roth withdrawal is included in your pension income, this is to determine your income for benefit purposes. Then any that is tax free in US (and thus Canada) is deducted on line 25600.

Remember that it is possible to have US taxable income in a Roth withdrawal.

[brianbbc]

I'm assuming you mean irs can tax roth withdrawals if you haven't met the 5 year opening rule or taking a distribution prior to age 59 1/2?

[nelsona]

Yes, such taxable withdrawals would also be taxable in Canada.

[nelsona]

But, in all cases, the entire amount or Roth withdrawal is reported in Canada as income, and then the portion that was non-taxable in US is deducted on line 256.