Need I report RESP distribution(EAP) as income?

Forum|Forum|4 years ago
April 6, 2022
5 replies
46 views

Get NR4 form, need I report it as income in 1040?

TurboTax Premier Online

JulieS

Level 15

Yes, you are required to report your worldwide income on your US tax return.

The US government does not recognize the tax deferred status of a Registered Education Savings Plan, so distributions are taxable.

The first step is to convert the CAD to USD, using the average currency exchange rates. Click here to find your rate.

Form NR4 is reported as interest income.

Open your return and select Federal on the left side menu.
Select Wages and Income toward the upper left.
Scroll down, or expand the list and find Interest and Dividends.
Expand that section and find Interest on 1099-INT.
Click on Add/ Edit to the right.
Select, I'll type it in myself, and click Continue.
For Received from, enter the name of the investment or the company.
Enter the amount and click continue.
Answer the next question No.

The RESP distribution needs to be reported as Other Income.

Select Federal on the left side menu.
Select Income and Expenses toward upper left.
Expand/ scroll down the list and find the section called, Less Common Income.
Scroll all the way down and select Miscellaneous Income, 1099-A, 1099-C.
Select Other reportable income.
Answer the first question Yes.
Enter RESP distribution as the description and amount on this page, click Continue.
Click through the rest of the section and finish your return.

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luol2016Author

Level 2

Thanks for your reply.

We're RESP grantor, my son is beneficiary. He cashed out money from account for university education. NR4 is issued for him with 15% tax withholding.

My question is if my son needs report EAP in his 1040.

We report RESP income in annual return. When my son receives distribution (EAP), tax is already paid by us. Need he report it as income again for tax?

I find one RBC document, could you help to clarify it?

Where someone else is a subscriber and/or contributor to
the RESP, and the RESP is a foreign grantor trust in respect
of such persons (as discussed earlier), a U.S. beneficiary
is not subject to U.S. income tax when they receive a
distribution from the RESP, provided the necessary U.S. tax
filings have been made.

https://ca.rbcwealthmanagement.com/docu ... c407a6943d

RobertB4444

Alumni - Intuit

If the NR4 is issued to him then yes, he will need to report it oon his return. But he is also entitled to education credits for the University that he is paying for with the money from the NR4. Hopefully they wipe each other out.

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