This should not be a problem.
In the separate CRA booklet on 217 (T4145), it explains how to handle the case where such an election is not favourable.
I would merely complete the 217 form exaclty as it asks (remember, you only report non-Cdn income on the Schedule A, and Schedue 1, not on the actual lines of the return).
I would Indicate '0" as the tax due, and send a note to the effect that, since the 217 election would result in a higher tax than you would otherwise pay, and that the correct rate of withholding was applied, you are rescinding the election.
You may be wondering about the logic of rescinding an election that you are making... don't worry.
Remember, many of us MUST file 217's because we have previously arranged a lower withholding rate on various Cdn-source income, thus it is not unusual for the election to be unfavourable, and CRA knows this.
CRA has provisions to 'ignore' the results of 217 if they are satisfied that (a) the correct withholding was made, and (b) all other Cdn-source income (if any) is being taxed correctly.
One thing, though, is that I would try and nail down from your state if they will indeed accept Cdn taxes (either withheld or paid) as a an 'other' state tax credit, and exactly what proof they need, since, by filing a 217 now, you are unlikley to get anything back from CRA until October.
You may be filing 217 for nothing, either because your stae won't accept the tax, or because they don't really need the CRA return to credit you, or because the 'proof' that CRA will provide is not acceptable.
It is <u>very rare </u> for a state to give a foreign tax credit; you may be chasing a ghost offered upto you by an uninformed telephone agent. The first person you spoke to may have been the expert, with the second one merely a trainee.
<i>nelsona non grata... and non pro</i>
How to report a company retirement fund to IRS
Moderator: Mark T Serbinski CA CPA
Just as a side note....
I woulds question whether you should be using the Cdn tax as a credit in any event, as likely the DEDUCTION is better off. As you know, very little of the cdn tax qualifies for a credit on the current years tax return, due to the way credits are calculated.
If that is the case, you would itemize on schedule A for IRS as a foreign tax deduction, and then the foreign tax deduction is automatically accepted by the state. No need to ask for a credit.
This works if you itemize your 1040 deductions rather than take the standard deduction.
<i>nelsona non grata... and non pro</i>
I woulds question whether you should be using the Cdn tax as a credit in any event, as likely the DEDUCTION is better off. As you know, very little of the cdn tax qualifies for a credit on the current years tax return, due to the way credits are calculated.
If that is the case, you would itemize on schedule A for IRS as a foreign tax deduction, and then the foreign tax deduction is automatically accepted by the state. No need to ask for a credit.
This works if you itemize your 1040 deductions rather than take the standard deduction.
<i>nelsona non grata... and non pro</i>
WOW, This is a great site. I just came to know about the world of Company Pension Plans from this thread.
I had a RPP from a company in Quebec that I was able to break and rolled over to one of my existing RRSP 2 years ago.
I did not write separate statements for transfer & transferee. But I wrote on one page this RPP XXXX was transferred in July 2003 to RRSP XXXX under Revenue Canada tax laws free of tax. Then I gave the year end balance for that RRSP, but not for the Company Pension Plan. I wonder this was correct.
I did not write s separate page for each RRSP either. I wrote about both of my RRSPs on one page. I used the language of 2003-75 bulletin IRS told me to use for the statement. I wrote the statement first and then put numbers 1,2 to give details of my 2 RRSPs (account number, bank name & year ned balance etc)
Now for 2004, I did not mentioned any thing about that RPP on 8891. Since I did not have that RPP anymore. But I filed 2 seperate 8891s for 2 RRSPs. Is this OK?
I had a RPP from a company in Quebec that I was able to break and rolled over to one of my existing RRSP 2 years ago.
I did not write separate statements for transfer & transferee. But I wrote on one page this RPP XXXX was transferred in July 2003 to RRSP XXXX under Revenue Canada tax laws free of tax. Then I gave the year end balance for that RRSP, but not for the Company Pension Plan. I wonder this was correct.
I did not write s separate page for each RRSP either. I wrote about both of my RRSPs on one page. I used the language of 2003-75 bulletin IRS told me to use for the statement. I wrote the statement first and then put numbers 1,2 to give details of my 2 RRSPs (account number, bank name & year ned balance etc)
Now for 2004, I did not mentioned any thing about that RPP on 8891. Since I did not have that RPP anymore. But I filed 2 seperate 8891s for 2 RRSPs. Is this OK?
I am not sure whether I got things totally under control. I recently withdrew that RRSP. From what I have read in other parts of this forum, I am confused about what to report as taxable income on line 16b. My RRSP was in US$ about $7238 when I entered America. Then I trasfered from RPP in US$ about $615 into this RRSP. When I withdrew the RRSP later the value was in US$ about $9541.
According to what I understand my tax would be in US$ (9541-7238)
since RPP US$615 should be reported totally as income. I don't know the value of RPP when I entered to US. The company never gave me that. Even if I knew that does RPP contribution made before US arrival consider as investment amount and exempt from tax?
According to what I understand my tax would be in US$ (9541-7238)
since RPP US$615 should be reported totally as income. I don't know the value of RPP when I entered to US. The company never gave me that. Even if I knew that does RPP contribution made before US arrival consider as investment amount and exempt from tax?