Do RIF taxes withheld in Canada count as estimated tax payments for the IRS

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wonderbar
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Joined: Sat Mar 20, 2021 10:58 am

Do RIF taxes withheld in Canada count as estimated tax payments for the IRS

Post by wonderbar »

We are US tax payers that will be getting CPP payments and RIF distributions for the first time in 2021.

We will be getting 15% tax withheld for RIF distributions in Canada and 25% tax withheld on CPP payments.

Does the IRS recognize the taxes withheld in Canada as estimated taxes paid?

What payments does the IRS require during the tax year on the Canadian income??
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Do RIF taxes withheld in Canada count as estimated tax payments for the IRS

Post by nelsona »

First, you are not supposed to have anything withheld from your CPP. Do they know you live in US? You need to get this corrected, as you cannot claim this tax as a foreign tax credit.

Any foreign tax you pay will reduce your IRS tax bill, but whether you need to pay more tax will depend on your other income. Estimated tax is based on how much you would owe after all your credits and deductions. If you owe too much at year end, you wil l(a) have a penalty and (b) need to make estimated payments for the following tax year(s).
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
wonderbar
Posts: 2
Joined: Sat Mar 20, 2021 10:58 am

Re: Do RIF taxes withheld in Canada count as estimated tax payments for the IRS

Post by wonderbar »

Thanks for the reply. CPP updated they are not taking tax in Canada
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