IRS on interest earned on RRSPs

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vcanusa
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Joined: Mon May 03, 2021 11:22 am

IRS on interest earned on RRSPs

Post by vcanusa »

Hello! I live in the U.S. as a permanent resident and I have RRSPs in Canada where I have not contributed or withdraw any money this year. The total amount on the RRSPs is over the IRS threshold so I am reporting them on form 8938. When I report the interest earned on this accounts as income on my 1040, it affects my IRS refund. It is my understanding that U.S.-Canada Income Tax Treaty provides an option to elect to defer current U.S. taxation on the accrued income. I am not sure how to do this. Do I need to report the interest earned on RRSPs or not? If so, what I should do to get the US taxation deferral?
Thanks in advance!
Alex
nelsona
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Re: IRS on interest earned on RRSPs

Post by nelsona »

Income (including not interest, but also other internal distributions and gains generated by sales) from RRSP is not reportable to IRS, unless and until a withdrawal is made.
No form is needed for this specific purpose. Of course, it is reportable as FATCA, as you mentioned, as well as FBAR.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Re: IRS on interest earned on RRSPs

Post by nelsona »

...including not ONLY interest...
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
vcanusa
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Joined: Mon May 03, 2021 11:22 am

Re: IRS on interest earned on RRSPs

Post by vcanusa »

Thank you so much! I really appreciate the help!
okinawafl
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Joined: Sun Jul 11, 2021 12:38 pm

Re: IRS on interest earned on RRSPs

Post by okinawafl »

I will have RRSP total approx 26k (contributions prior and this year) by the end of this year. May I know except FABR, do I also need file any other schedules to IRS?

And would there be any reporting requirements for New York state and New York City?

Is it only California in U.S. will not follow treaty rules and tax on income earn in RRSP?

Thanks.
nelsona
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Re: IRS on interest earned on RRSPs

Post by nelsona »

If that is all you have, then only FBAR is required.
Only California taxes internal RRSP income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
okinawafl
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Joined: Sun Jul 11, 2021 12:38 pm

Re: IRS on interest earned on RRSPs

Post by okinawafl »

Thanks a lot nelsona.
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