Canada Pension Plan NR4 with Code 46

[Robert1040]

Please some clarification.  I believe I'm understanding correctly that the CPP on NR4 would report like SSA-1099.  My wife has spousal benefits from SSA reported on SSA-1099, and also Canada Pension Plan benefits reported on NR4 with a code 46.  Do I merely add the SSA-1099 box 5, with her NR4 box 16 (with CAD converted to USD)?  Also, when converting her CAD amount to USD, is it acceptable to use the IRS Yearly Average Currency Exchange Rates for Canada $$$ to US $$$ (1/1.301)?

[JohnB5677]

You're in the right area with the SSA-1099.

1. Go to Wages & Income
2. Scroll to Retirement plans and Social Security
3. Select Canadian Registered Pension Income
4. Start the interview.

In general, use the exchange rate prevailing (i.e., the spot rate) when you receive, pay or accrue the item.  If she gets periodic payments, you can use the Yearly Average exchange rate,

[ddochter]

I had the same question.

From what I have been able to learn online, there are a couple of approaches for code Income code: 46 (in my case Canadian CPP).
1. Convert the CAD box 16 into USD and add to Box 5 Net Benefits for 2022.

2. Check the box Railroad Retirement benefits (Form RRB-1099). Learn More refers to this as "How are taxable Social Security benefits calculated?" and answers the question "Are your Social Security or Railroad Retirement benefits taxable?" .

3. Convert the CAD box 16 into USD and add to the RRB-1099 Box 5 Net Social Security Equivalent Benefis Paid in 2022.

This has the same net effect as adding the US equivalent to box 16. The advantage I assume is I can see the different numbers reported in TurboTax.  This whole approach is kinda "clunky" IMHO.

[Robert1040]

She also has a "Canadian Registered Retirement Savings Plan (RRS)" from her work in Canada and where you indicate is where her RRSP would be entered.  I think the Canada Pension Plan, reported on NR4 is similar to SSA and would get the tax treatment of 1/2 for SSA (see line 2 of the Social Security Benefits Worksheet of 1040).  If I enter in the RRSP it's going to be taxed on the full amount, where reported similar to SSA-1099, it's going to get taxed on only half.  I don't think reporting it like a RRSP is corrrect.  

[Robert1040]

I like this better than reporting as a Canadian RRSP.  Plus, the $$$ get separated, which seems like a good idea.

[ddochter]

I understand that Canadian Registered Pension Income was for Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF). It does all get added up the same section of the Form 1040 Line 6 Social Security Benefits Worksheet, as the calculation to derive the Taxable Social Security Benefits amount on line 20 of the worksheet is based on the amounts in the form line A and F above.

Not sure why Intuit doesn't just add a step for doing all this for us Canadians. My understanding is there are a million of us here in California alone .... let alone the rest of the US :>)

Always happy to give the government more tax money though ... no matter how it gets determined in Turbo Tax. LOL

[ddochter]

Good catch.

Canada Pension Plan (CPP) and Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) are calculated differently. The following is right out of Turbo Tax help:

How are taxable Social Security benefits calculated?

Are your Social Security or Railroad Retirement benefits taxable? It depends on your income and your marital status. We'll figure it out for you based on the information you enter.

Here's how it works:

• We add up your total income, including your tax-exempt income and other adjustments the IRS requires
• Then we add one half of your benefits to this total
• Next, we compare this to a "base amount" (see below)

If the total is more than the base amount, some of your benefits will be taxable.

The base amount is:
$25,000 if you file as Single, Head of Household, or Qualifying Surviving Spouse
$32,000 if you're married and file a joint return with your spouse
$25,000 if you're married, you file separately from your spouse, and you and your spouse lived apart all year
$0 if you're married, you and your spouse file separate returns, and you lived together at any time during the tax year

[Robert1040]

Thank you!  

I think I'm going with your option 1, converting to USD and adding to her SSA-1099.  Turbotax says it should be treated like SSA-1099 and since she doesn't have a RRB-1099, I'm just going to add the SSA-1099 and the (converted) CCP NR4.  

Good point on Lines A and F coming down to Line 1.  I think not having a RRB-1099 might be more likely to raise an IRS flag, than a greater amount on Line A for her that reported on the SSA-1099.  Either way I could wave the papers in front of 'em if they ask how I came up with the number.  

Also, it would be good for the IRS to add a "Line H" for Canadian retirees on the Social Security Benefits Worksheet, and Turbotax add it to their program.

Robert1040 over-and-out.

[DaveF1006]

Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) are generally treated the same as U.S.-based retirement plans such as 401k and IRA accounts. In other words, income in these plans is usually exempt from U.S. income tax until distributions are taken from the plan. 

If you have a RRSP or RRIF, you generally need to report any distributions from these plans. In some cases, you may need to report current income as it accrues in the plan.

This is not treated nor taxed the same way as US Social Security but is reported as a taxable pension on line 5b of the 1040.

@ddochter 

[Robert1040]

Thank you, but Canada Pension Plan is similar to Social Security and is treated by the IRS the same way as Social Security Benefits.  Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs)  are like Pension Plans, 401-k  and IRA's and they that are taxed differently than SSA benefits.  See this;

 https://www.goldinglawyers.com/us-taxation-of-canadian-pension

My wife has a RRSP from her work at York U, and a CCP having worked for 35 years with Landed Immigrant status.  I report her RRSP like a Pension Plan and her CCP like SSA.  I think this is the correct way, although Turbotax and the IRS Social Security Benefits Worksheet do not make it very clear on how to report CCP.  It would be great for Canadians now living in the US if there could be some simple clarifications.  IMHO. 

[DaveF1006 · Accepted solution]

Yes. Report this as described in the following Turbo Tax post. If you enter the information in this manner, all the numbers in the forms should appear correctly as if this was a Social Security Benefit payment.

1. "In TurboTax, open your return and search for SSA-1099, then select Jump to in the search results
2. On the Did you receive Social Security or Railroad Retirement benefits? screen, select Yes
3. On the Tell us about the benefits you received screen, check the first box for Social Security benefits (Form SSA-1099)
4. Enter the total Canadian CPP and OAS payments you received during 2022 in Box 5
   • If you already have something in Box 5 from a previously entered SSA-1099, add your CPP/OAS benefits to the amount already there
   • In the uncommon situation where taxes were withheld from your payments, enter the total withheld during 2022 in Box 6
5. Select Continue and follow any additional instructions".

[AMG-VG]

If receiving both SSA-1099 for the USA and Canada Pension Plan NR4 ammouts do I add the respective amounts together and enter into box 5?

[DaveF1006]

No, there should be made in two different entries. When you visit the Retirement Plan section, there should be a separate listing for Canadian Registered Pensions.  Enter the information here. 

There'll be two lines of information, one for the distribution, and one for the taxable part of the distribution. Enter the distribution but don't enter the same amount for the taxable part of the distribution because this isn't taxable in the US..