LUMP SUM WITHDRAWAL OF PENSION MONIES

MJTREMEL · Post by **MJTREMEL** » Tue Feb 03, 2015 2:24 pm

THANKS FOR YOU HELP I TRULY APPRECIATE IT!!! I have another question. my husband withdrew all funds he had in a company pension in 2014. London Life, who maintained the funds for him, kept back about $5000 in taxes, how do I get that back? Can we get it all back or at least a portion?

nelsona · Post by **nelsona** » Tue Feb 03, 2015 2:40 pm

Can I ask if the tax witheld was 25% or 15% of the total lump-sum? the company would know that he is non-resident correct?
Was he issued an NR4 form?

In US he will report this income on 1040, and use the Cdn tax as a credit using for 1116.

There is a way to reduce sligly the tax -- if he had little or no other income in US -- but you probably will then pay more in US.

nelsona · Post by **nelsona** » Tue Feb 03, 2015 2:41 pm

.., and please do not write in ALL CAPITAL LETTERS

MJTREMEL · Post by **MJTREMEL** » Tue Feb 03, 2015 3:42 pm

I think it was probably 25%, yes they knew he was a non-resident. Not sure about theNR4 form though

nelsona · Post by **nelsona** » Tue Feb 03, 2015 3:55 pm

So, what about the other quaestions? Did he have otherincome from any other sources.

There is a procedure known as section 217, where one files a return "as if" one lives in canada, declaring all world income, but only to calculate a better (lower) rate than what was withheld on the pension.

If this pension was his major source of income and he was withheld at 25%, it would definitely be worth looking into this.

MJTREMEL · Post by **MJTREMEL** » Tue Feb 03, 2015 3:58 pm

thanks, no he worked for 7 months in the US so I think the best route for us is to claim as income on our US taxes and file the 1116 form.

Next question, should we still file married filing jointly or would it be better to file married, filing separately?

nelsona · Post by **nelsona** » Tue Feb 03, 2015 4:09 pm

It is always bwetter to file jointly. Like you have been doing all along, I hope.

MJTREMEL · Post by **MJTREMEL** » Tue Feb 03, 2015 4:15 pm

yes we have always filed jointly. thank you so much for your help.... I have been trying to get answers with no success until I found your website. I appreciate your assistance and will be sure to recommend the website to my friends

nelsona · Post by **nelsona** » Tue Feb 03, 2015 4:20 pm

It isn't my website, but thanks.