On which form do I enter distribution which is reinvested within my Canadian Registered Retirement Savings Plan?

[Razi]

I am doing my taxes in the USA.

[LindaS5247]

Your reinvested Canadian Registered Retirement Savings Plan (RRSP) distributions are generally reported on Form 1040, Line 5a and 5b (as pension/annuity income) and on Form 1116 to claim foreign tax credits.  The IRS treats the distribution as a taxable withdrawal even if it is reivested in Canada.

Use the "Canadian Registered pension" section in TurboTax to enter the income and foreign taxes paid. This is found under Wages & Income, Retirement Plans And Social Security Canadian Registered Pension Income. Select Start to the right of Canadian registered Pension Income.

Follow the TurboTax screens and answer any follow-up questions to properly report your Canadian Registered Retirement  Savings Plan.

Please return to Community if you have any additional information or questions and we would be happy to help.

[Razi]

Thanks, Linda...much appreciated!

OK, so another question with regards to TFSA [Tax Free Savings account in Canada]: I have distribution from this account and is reinvested, as well, hence, where do I report this amount with TURBOTAX on the US side of filing taxes? 

I have already filed, hence, will have to correct the information on my RRSP + TFSA distributions and re-submit. Secondly, TURBOTAX generated 1040 and I realized that it was 1040-NR [for taxation year 2024], how do I correct this with my TURBOTAX account so that It generates 1040-NR [and not just 1040]?

I believe, I should write a letter to IRS explaining the mistakes and that I intend to correct it. Do we have an option to submit a ticket via their web site or the only option is to mail a letter to them explaining the issues and that I intend to correct it.

Per TURBOTAX I was advised to file FBAR, which I did , however, me being a US nonresident alien, is it required?

Lastly, with regards to Rental Income, for taxation year 2024, I had filed with CRA in Canada, do I need to report it on the US side, as well? If yes, would I not be double taxed? What forms are needed with TURBOTAX USA?

[DaveF1006]

Once you’ve filed a 1040 in TurboTax, you can’t just switch to a different form. The standard TurboTax versions—like Deluxe and Premier—don’t support Form 1040-NR. They’re designed for resident filings only. You need to file a 10.40 NR return with Sprint Tax.

 Here are instructions how you will handle the transition from a resident to a non-resident filing..

To correct your filing, you must submit a paper amendment. The IRS does not currently allow a "ticket" or digital message to fix a wrong form type.

1. Form 1040-X: This is the "Amended Return" cover sheet. You will fill out your name, address, and the "Explanation of Changes" section
2. The Correct Return: Prepare a fresh Form 1040-NR. Since TurboTax doesn't do this, you may need to use Sprintax (TurboTax's partner for non-residents) or manually fill out the 1040-NR. 
3. Write "AMENDED" across the top of your new 1040-NR.
4. Mailing: You must mail the 1040-X along with the 1040-NR and any supporting schedules to the IRS address listed in the 1040-X instructions (usually the Austin, TX office for non-residents)

For a Non-Resident Alien (NRA) filing a 1040-NR, the rules for a TFSA are different than for a US Citizen/Resident.

Reporting: On a 1040-NR, you generally only report US-source income. If your TFSA is held in Canada and contains Canadian investments, the distributions and reinvested amounts are not reported on your US 1040-NR.

Correction: If you previously reported TFSA income on your 1040 as if it were US taxable income, you would remove those amounts on your amended return (Form 1040-X) because they are foreign-source income for a non-resident.

An FBAR report is not required to be filed on your 1040 NR return. The filing requirement is only vlid for US residents. 

In regards to rental income, US non-residents are not required to report non US-sourced income thus reporting your rental income on a 1040 NR return is not required.

[Razi]

Great, thanks!

For both the TFSA and the RRSP distribution, I had used 1099-R with the code G [and both are incorrect based on your response and Linda's response].

So, with the SPRINT TAX, where do I report both the [RRSP + TFSA] both Canadian distributions? 

Thanks!

[DaveF1006]

You don't report these on a 1040 NR. Under the 1040-NR rules, the IRS only cares about U.S.-sourced income. Because both the RRSP and TFSA are Canadian accounts, their distributions are typically considered foreign-source income and thus are not reportable for US tax purposes.

[Razi]

HI Dave,

I visited the Sprintax site to determine the eligibility for a resident / non-resident, and based on the number of days that I have been in the USA, I am considered a resident for tax purposes [I had relocated to USA on August 03, 2024 and since then KI have been here]. So this means, the form 1040 is correct, however, I need to make corrections as per below message:

Use the "Canadian Registered pension" section in TurboTax to enter the income and foreign taxes paid. This is found under Wages & Income, Retirement Plans And Social Security Canadian Registered Pension Income. Select Start to the right of Canadian registered Pension Income.

So, the above will correct the RRSP portion but where to enter the distribution [reinvested] on my TFSA account?

Am I correct with my understanding?

Hope to hear from you. Thanks!

[RobertB4444]

TFSA distributions are taxable in the US.  The US does not recognize them as tax-free accounts.  So any distributions - actually, any earnings, whether they are distributed or not - should be reported on your US tax return as what they are - interest earned.

If the value of the TFSA exceeds $10,000 then it needs to be reported using an FBAR.  Here is a good article on reporting foreign bank accounts.