I lived in Canada for 2 years in 2015 and 2016 and contributed to my employers pension. I left Canada and moved to the US and am now a US tax resident (but not citizen). In the past 6 months I have been permitted to withdraw the full amount of my Canadian pension and have been sent a check for the full amount, less 25% Canadian taxes.
1) I believe I have to report this as income on my US tax return, but that I can claim a foreign tax credit for the 25% Canadian tax paid on it?
2) What is the process to report this?
3) They issued the check in December 2020 but I received it in early January and have not cashed it yet. Can I choose to declare this income either on my 2020 return or 2021? Or do I have to declare this in my 2020 return.
4) What currency exchange rate should I use? Can I use the average annual rate for the year I file in as listed here: https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates ?
