RRSP Election to Defer

jewel · Post by **jewel** » Fri Apr 02, 2010 3:04 pm

Hello,
I read recently that the Canadian 25% withholding on a RRSP withdrawal can not be claimed as a foreign tax credit in the US because the country of residence is considered to be the source.

Is this still the case if someone does not elect to defer taxation in the US?

Thanks

nelsona · Post by **nelsona** » Wed Apr 07, 2010 12:48 pm

No, the country of source is canada. All RRSPs are considered resident in Canada.

The info u=you got was completely wrong.

nelsona · Post by **nelsona** » Thu Apr 08, 2010 7:23 am

Of course, since not all the RRSP withdrawl will be taxable in US, and since your US tax rate is unlikly to be 25%, it is almost guaranteed that you will not be able to USE all of the 25% tax asa credit on 1116, that is, there will be a LOT leftover.

That may be where you are getting confusing info.

But the tax is certainly foreign tax, and the RRSP is certainly foreign income, in the eyes of IRS.