I am a US citizen living in Canada as a permanent resident (my wife is Canadian). I work in Canada and pay all the appropriate income taxes (CPP, Federal, and Provincial). At tax time I file my US and Canadian taxes. My problem is this.... I have a US pension that gets paid out monthly. The US taxes are withheld, but no Canadian taxes are withheld. Since I am living in Canada as a permanent resident, I am told I must pay Canadian taxes on the total amount shown in the 1099-R. In addition, if I take distributions from my 401K, I am told I will have to pay Canadian taxes on that as well.
In the next couple of years I will retire and begin to draw US Social Security. Will I have to pay Canadian taxes on that as well?
Is there any way to not have to pay Canadian taxes on these retirement distributions from the US?
US citizen paying Canadian Taxes on US retirement income
Moderator: Mark T Serbinski CA CPA
Your pension and 401(k) are subject to US tax and Cdn tax too, but you get credit for the Us tax you pay.
Your SS will NOT be taxed in US, it will in Canada ONLY. This is a special treaty arrangement that US/Canada have for this income only.
Your SS will NOT be taxed in US, it will in Canada ONLY. This is a special treaty arrangement that US/Canada have for this income only.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best