First year (2023) having taking a small distribution from Canadian RRIF. Got an NR4, indicating the amount, and the Canadian taxes withheld.
I assumed all of these taxes withheld could be used against our US income, due to the tax treaty.
But, after completing all the steps (several times), I am seeing this:
Entered the full amount taken in the Canadian Pension section under income.
Went throught the questionnaire for the foreign tax credit (Form 1116).
The taxes withheld were >$300, but the resulting tax credit is $66. I don't understand why?
We have plenty of other income and US taxes paid to offset this, that is not the issue. What am I doing wrong?
This will become a much bigger issue as we start taking more out of the RRIFs starting in 2024, so I need to figure this out.
Thank you for any help!
