401(k) contributions as TN - Deductible as RRSP contribution

Turpentine · Post by **Turpentine** » Tue Apr 09, 2013 8:52 am

Hi,

I am a resident of Canada who took a leave of absence of his regular job in Canada and worked from 15Jan2012 to 30Jun2013 on a TN in the US. I made contributions to an employer-sponsored retirement account while in the US. I am very confused about whether or not I can claim my US 401(k) contributions as RRSP contributions in Canada, up to my RRSP annual limit obviously.

Discussions I have seen regarding a 2008 update of the US-Canada tax treaty seem to indicate that yes, though form RC268, which seems to be the right one, sounds less clear. Anyone here has an idea of what the actual rule is?

Many thanks!
Nick

nelsona · Post by **nelsona** » Tue Apr 09, 2013 10:26 am

You can.

there is a form that you need to fill out, it is mentionned in the CRA guide.

It means you must add back your 401(k) contribution (not Roth401(k)) to your wages on your W-2 and report this as your wages, then you deduct the 401(k) contributions you made.

Turpentine · Post by **Turpentine** » Tue Apr 09, 2013 3:57 pm

Many thanks for your reply. So if I understand correctly, the end result in terms of taxable income is exactly the same (i.e. add contributions to W-2 income and then substract it later on)? I guess I won't bother then.

nelsona · Post by **nelsona** » Tue Apr 09, 2013 5:42 pm

Um, you MUST "bother", otherwise CRA will deny your 401(k) ciontribution as a deductin and raise your Cdn assessment.

Just follw the rules, even if it is a bother to you.