Section 217 World Income

emma3281 · Post by **emma3281** » Tue May 05, 2015 11:40 pm

Apologies if this has been covered in another thread.

My wife and I are Canadian permanent residents of the U.S. We have been withdrawing from our Cdn RRSPs. Our Canadian broker withholds tax at a rate less than 25% because we filed CRA form NR5.

Each year we file a Canadian tax return and make a Section 217 election and properly fill out Schedule A "Statement of World Income".

We also have a U.S. brokerage account which contains some Canadian stocks which pay dividends. Therefore, for our Canadian tax returns, I report the Canadian dividends received by us here in the U.S. into Schedule A under "Income from Canadian Sources".

Our U.S broker withholds 15% foreign tax which I assume goes to the CRA.

I'm assuming that I can get credit for the taxes withheld by my US broker on those Canadian dividends and that they can be reported somewhere on the T1 General?

nelsona · Post by **nelsona** » Wed May 06, 2015 9:59 am

No, that is your NR tax that was owed on this income,. That's it. The tax your paid will be "credited" by the calculation that is done on the last lines on schedule C.

You use the tax on your 1040.

emma3281 · Post by **emma3281** » Wed May 06, 2015 2:34 pm

Thank you Nelsona for the info.

One other question if I may . Are premiums paid for Obamacare medical insurance and other U.S. medical expenses deductible on my Canadian return?

It seems to be too good to be true if they are. It would be a substantial deduction.

nelsona · Post by **nelsona** » Wed May 06, 2015 2:54 pm

Certainly, along with all other medical expenses, subject to the limits on schedule 1.

I've been reminding people for years to use those substantial US medical costs on 217.

In fact even those of the spouse not making the 217 claim are also deductible.

You should also be looking at converting your RRSPs to RRIFs so that with holding on 10% withdrawal is only 15%, no need for 217.

Which one of you is not working? 217 really only works for that person.

emma3281 · Post by **emma3281** » Wed May 06, 2015 3:19 pm

Thanks again.

I am retired and have been using sec. 217 for the last 3 years. Wife has gone to part time with extremely small income (5-8k) and so we are doing sec 217 for the first time with her.

nelsona · Post by **nelsona** » Wed May 06, 2015 3:51 pm

so, you have some play with the medical and other expenses, such that you minimize the tax between you (or increase the RRSP withdrawals at low rate).

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