Canadian citizen and Green card holder university in Canada

[areefer]

Hi,

My son started university in Canada this September. He's a Canadian citizen with US Green card. He has US income from a part-time job. He has no Canadian income except $5,000 from his RESP (held by grandparents in Canada).

Does he need to file a Canadian tax return? Or can we just file a US return and count the RESP as income.

Also, I assume we only need to claim the EAP (grants and growth portion)?

Thanks.

[nelsona]

Well, for Cdn tax purposes, the taxable portion of the RESP money he receives is considered HIS income and is Cdn sourced, so he will need to file a Cdn tax return to report it. The RESP trustees will send out aT4A tax slip in his name. The taxable portion is, as you say, the grant and growth portion). Eventually, this taxable portion will become smaller and smaller. Being a student, he is probably considered a non-resident of Canada, but regardless he still has to report that income in Canada first.

HE will then also report this income on HIS US tax return.

In both countries, he should have sufficient tuition credits to remove any tax.

Now, he *likely* has to file a form 3520 for IRS, since he is now collecting foreign trust money. Some on this forum may have experience with this.

[areefer]

Thanks nelsona. That's what I figured but wanted to confirm.

But I didn't realize that he would need to also fill out a 3520. Crap. I thought those days were behind me. Need to more research.

Thanks.

[nelsona]

They were -- for YOU reporting the existence of the RESP -- when you transferred his RESP to the Cdn grandparents.

But now, he is receiving funds, so HE likely now needs to report the income on 3520 (and on 1040).