25 June 2022 11:13

Foreign retirement contribution deductibility?

For foreign tax purposes, no deduction is allowed in the foreign country for the pro rata portion of the retirement contribution that is deductible for U.S. tax purposes and apportioned to reduce foreign source income.

Can I deduct foreign pension contributions on my taxes?

If you reside in a foreign country and receive a pension/annuity paid by a U.S. payor, you may claim an exemption from withholding of U.S. Federal Income Tax (FIT) under a tax treaty by completing Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting, and

Are contributions to a foreign pension plan tax deductible in Canada?

If as a resident of Canada you continue to contribute to a foreign retirement plan, there are a few matters which you should be aware of for Canadian income tax purposes. Firstly, contributions made to the foreign plan are generally not deductible.

Are U.K. pension contributions tax deductible in Canada?

Contributions to the closed private pension funds are deductible from taxable income in accordance with Section 10, paragraph 1, Clause 5 of the “Law on Personal Income Tax.” Provided that the person meets all of the conditions, employee contributions to a closed private pension funds may also be deductible in Canada.

Is foreign retirement income taxable in the US?

US Taxation of Foreign Pension Income
With certain US qualified pensions, income accrues tax-free. However, foreign pensions are treated as the income of the participant which is subject to taxes annually. In some cases, this is punitive if the foreign plan fund invests in foreign mutual funds or exchange-traded funds.

How do I report a foreign pension in Canada?

Report on line 11500 of your return, in Canadian dollars, the total amount of your foreign pension income received in the tax year. Attach a note to your paper return identifying the type of pension you received and the country it came from. You may be able to claim up to $2,000 on line 31400.

Are 401k contributions tax deductible in Canada?

Under the US-Canada tax treaty, your contribution to the plan (up to your remaining RRSP deduction room) will be deductible for Canadian tax purposes. But you need to be careful because your 401(K) deduction on your Canadian return is limited to your RRSP contribution room minus any other RRSP contributions.

How do you report foreign retirement income?

How to report foreign pension income

  1. FinCEN 114 (FBAR) if you held over $10,000 in foreign accounts, including your foreign pension plan, at any time of the year.
  2. FATCA Form 8938 if your combined foreign accounts and assets are worth over a certain value.
  3. Form 8621 if your pension qualifies as a PFIC.

Do I need to report foreign retirement accounts?

FBAR & Foreign Pension Plans
When a US person has foreign bank and financial accounts that in total exceed more than $10,000 on any day of the year, FBAR (FinCEN Form 114) reporting is required.

Where does foreign pension go on tax return?

This income will appear on Form 1040 U.S. Individual Income Tax Return, Line 1 (if entered in the Foreign Employer’s Compensation Amount field) or Form 1040, Line 4 (if entered in the Foreign Pension Received or Taxable Amount of Foreign Pension fields).

Is a foreign pension taxable in Canada?

Pension benefits you receive from outside of Canada are regarded as taxable income in Canada when you file your annual income tax return. These benefits must be reported in Canadian-dollar terms on line 115 of your T1 return.

How does CRA know about foreign income?

How does CRA know about foreign income? Along with these tax treaties come information-sharing agreements. For example, the CRA in Canada and the IRS in the United States have an agreement where they share earning information for citizens from each other’s countries.

How do I enter my foreign pension on TurboTax Canada?

In TurboTax Online, the fastest way to get there would be to use the “Find” tool in the top right. Click “Find” and search for “Foreign Income”, then select it from the list and click on the “Go” button. Then click on “Enter Foreign Income”. Enter amounts in Canadian dollars (from your bank book).

Is US retirement income taxable in Canada?

Pensions, Annuities, Social Security, and Alimony. Under Article XVIII, pensions and annuities from Canadian sources paid to U.S. residents are subject to tax by Canada, but the tax is limited to 15% of the gross amount (if a periodic pension payment) or of the taxable amount (if an annuity).

How US retirement plans are taxed in Canada?

If you are a US person living in Canada, your IRA income will be taxed at the US graduated tax rates when you file your US tax return and you can then claim that US tax paid as a foreign tax credit when you report the same income on your Canadian return.

How much foreign income is tax-free in Canada?

$12,069

You can earn up to $12,069 (2019) tax-free if at least 90% of your total income is from Canada. If more than 10% of your income came from outside Canada, you aren’t eligible for that basic personal deduction amount.

How can double taxation be avoided in Canada?

To avoid the double taxation that would result from having the same income taxed in both the source and residence country, Canadian residents are entitled to relief in the form of a credit or exemption.

How can double taxation be avoided on foreign income?

To avoid double taxation of U.S. sourced income, expats must pay U.S. tax and then claim foreign tax credits in the country they live in.

How long can you live outside of Canada without losing citizenship?

A Canadian can stay for up to 182 days per calendar year (without paying U.S. income tax). Visitors can stay for maximum of six months in each 12 months (not a calendar year, but counting backwards 12 months from your date of entry).

Can I keep my Canadian bank account if I move abroad?

Therefore, provided you have severed primary residential ties to Canada, it is possible to maintain certain secondary ties to Canada such as maintaining a bank account, investment account or credit card. The date you become a resident of the new country you are immigrating to.

Does CRA know when you leave the country?

The Government of Canada collects biographic entry information on all travellers entering the country, but currently has no reliable way of knowing when and where they leave the country.