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Where to enter canadian NR4 form with income code 43 (box14)

I received a Canadian tax form NR4 with income code 43 which is a lump sum distribution of RRSP. Do i convert that into SSA-1099 or do I go the Form 1116 route for foreign tax credit or something else?

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11 Replies
KarenJ
Intuit Alumni

Where to enter canadian NR4 form with income code 43 (box14)

You can enter the RRSP income as follows:

  1. Click on Federal Taxes at the top of your screen
  2. Click on Wages & Income
  3. Scroll down to Retirement Plans and Social Security
  4. Click on Start next to Canadian Registered Pension Income

Don't forget to translate the income to USD.

To report the Canadian tax paid on your pension:

  1. Enter foreign tax credit in the search box at the top of the page and click the Jump to link
  2. Click 'Yes" you paid foreign taxes
  3. Click through the screens regarding foreign interest and dividends
  4. Click yes that you have reported all your foreign income already in TurboTax
  5. Click that you want to take a credit
  6. Answer question about the Simplified Limitation Election
  7. Choose income type for pension - it will be General category income
  8. Add Canada
  9. Enter description - Canadian RRSP or pension
  10. Enter Income amount that you previously reported under Canadian RRSP income
  11. Enter your taxes you paid on your Canadian pension in the box "Other income"

[Edited 03.27.19 | 3:29 pm]

Where to enter canadian NR4 form with income code 43 (box14)

Maybe it is OK for income ((NR4 box16), but where I can enter tax I paid already to Canada on this income (NR4 box17)? What form? I cannot find the answer anywhere! It's so common situation. Withdraw RRSP; got NR4 with code 43 and just two numbers - income and tax paid; what form I should use for entering those two numbers?  
KarenJ
Intuit Alumni

Where to enter canadian NR4 form with income code 43 (box14)

I edited my response to include the steps for reporting your Canadian taxes paid.  Please review.
djk80
New Member

Where to enter canadian NR4 form with income code 43 (box14)

Hi, when going to the Tax Credit (for taxes I paid in 2020 for this current tax year) > It asks if I have any credit to carry over from 2019 ? I select no and then it kicks me out? How do I claim a credit for the current tax year that paid taxes on?

Irene2805
Expert Alumni

Where to enter canadian NR4 form with income code 43 (box14)

You can only get the Foreign Tax Credit if you had foreign income and paid foreign taxes on that income.  Be sure to enter the foreign source income and the foreign taxes paid before calculating the credit.

 

For example, if you paid foreign taxes on dividends you received:

  1. On the screen Let's get the info from your 1099-DIV be sure to mark the box My form has info in other boxes (this is uncommon).
  2. Enter the Foreign Tax Paid in Box 7.


Then, to calculate the credit for foreign taxes paid please follow these steps:

  1. Click on Federal  > Deductions & Credits
  2. Scroll down to the Estimates and Other Taxes Paid section and click on the box next to Foreign Taxes
  3. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
  4. Continue through the screens, entering the requested information .

@djk80

djk80
New Member

Where to enter canadian NR4 form with income code 43 (box14)

@Irene2805   - Hi so I think the issue is that for the below information ::: When you go to Federal > Deductions and Credits. Foreign Taxes > Take a Credit > It only asks about credits paid on previous years (2019 being the latest when I'm filing for 2020) My income was paid through a RRSP , NR4 Code 43 (Where you can enter in a RRSP withdraw information has nothing about taxes being paid) The amount was withdrawn and taxes were automatically witheld during the RRSP withdraw in 2020 --- The "Take a Credit" option on foreign taxes has no option for the current tax year you are filing for only for previous years where you paid foreign taxes. I'm not sure how to indicate I paid foreign taxes for the current 2020 the year that I am filing for? 


These steps are only for previous years where taxes were paid not the current tax year

  1. Click on Federal  Deductions & Credits
  2. Scroll down to the Estimates and Other Taxes Paid section and click on the box next to Foreign Taxes
  3. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
  4. Continue through the screens, entering the requested information .
kimras
New Member

Where to enter canadian NR4 form with income code 43 (box14)

Hi,

 

What is the definition of Total distribution and Taxable part of distribution?

Is total distribution the gross income or net?  The NR4 only has 2 numbers: Gross income and Non-resident tax withheld.  So what is the taxable part of distribution?

MarilynG1
Employee Tax Expert

Where to enter canadian NR4 form with income code 43 (box14)

@kimras The 'Taxable Amount' is normally the same as the 'Gross Amount', which is also the 'Total Distribution' reported on your NR4. 

 

You are taxed on the Gross Amount, but given a tax credit for tax you paid.

 

You can enter the Gross Amount as 'Other Income', and get a credit for tax you paid in the Foreign Tax Credit section under 'Deductions & Credits'.  Choose the 'General Income' category in that section. 

 

Click this link for more info on How to Report Other Income.

 

 

 

 

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ArleneC
New Member

Where to enter canadian NR4 form with income code 43 (box14)

I have this exact situation for 2022.  I received a lump sum distribution of my Canadian RRSP which the bank withheld taxes.  As a result, I received an NR4 indicating the Gross Income in Box 16 & the taxes withheld in Box 17. 

 

Do I still follow the same entries as detailed in this thread which is:

1) Under Wages & Income, enter the NR4 indicated in Box 16 (converted USD amount) 

2) Under Deductions & Credits, then Estimates and Other Taxes Paid, enter the NR4 indicated in Box 17 (converted USD amount) 

 

Am I paying taxes twice - Canada & USA?

Where to enter canadian NR4 form with income code 43 (box14)

Yes, that is correct. The US tax is calculated on the foreign source income and you are geting a credit for the foreign taxes you paid to Canada so in essence you are "NOT" paying the taxes twice.

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vwli
Level 2

Where to enter canadian NR4 form with income code 43 (box14)

Total Distribution is the actual total amount of the RRSP distribution.
Taxable Part of Distribution is the taxable amount of the RRSP distribution using Pro-Rata rule depending on your cost base calculation:

  • For Canadian citizens who are U.S. residents (but not U.S. Citizens), the amount of contribution including interest, dividends and any realized capital gains up to the day a person becomes a U.S. tax resident is considered principal (cost basis) for U.S. tax reporting purposes. The cost basis does not include any unrealized capital gain.
  • For a U.S. citizen who is also a tax resident of Canada, your principal contribution to the RRSP will be your cost basis. Further, if the contributions were deducted on your U.S. Form 1040 income tax return, then your deduction does not increase cost basis.
  • Cost Basis Defined: Cost Basis is what the U.S. considers the original cost of property or an asset, adjusted for depreciation.
  • Reference: https://akifcpa.com/how-to-treat-resp-and-rrsp-canada-distributions-on-u-s-income-tax-returns/
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