Retirement tax questions

Hi Douglas,

The US and Canada have a treaty regarding the taxation of some types of income. Per IRS Publication 915:

Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U.S. residents are treated for U.S. income tax purposes as if they were paid under the social security legislation of the United States.

In other words, if you're a U.S. resident, you'd enter your Canadian CPP and OAS benefits as though you had received a Form SSA-1099 from the Social Security Administration.

The U.S.-Canada tax treaty also applies to the Quebec Pension Plan (RRQ). Please note that the agreement only addresses government-issued social security benefits, not money received from private Canadian pensions.

IRS Source: https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

Tips: https://turbotax.intuit.ca/tips/the-canada-pension-plan-5570

Depending on your other taxable income, your Social Security benefits may be taxable.

You will pay tax on only 85 percent of your Social Security benefits, based on Internal Revenue Service (IRS) rules. If you:

• file a joint return, and you and your spouse have a combined income* that is
  • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $44,000, up to 85 percent of your benefits may be taxable.

SSA Source:

https://www.ssa.gov/benefits/retirement/planner/taxes.html