Canadian RRSP

[j9gibb]

I have entered my Canadian RRSP withdrawal on form 1116.  I am claiming a foreign tax credit on RRSP withdrawal.  I have entered both the "total distribution" of $7000.00 and the Taxable distribution of $5400.00 on this form.  Am I also required to enter the $5400.00 as income or is this duplicating the amount?  How much of the $2400.00 I paid in withholding taxes to the Canadian government am I able to claim as a tax credit on my US return?

[MonikaK1]

When reporting a foreign pension on your tax return, report the full amount received. Do not deduct taxes paid from the gross income received.

Generally, foreign pensions are taxable to US citizens or residents.  However, some foreign pensions might not be taxable if it is covered under any tax treaties between the foreign country and the United States. Seek legal advice if you are not certain whether your pension income is covered by a tax treaty.

If your foreign pension is taxable, you will need to create a substitute form 1099-R. 

Here are the steps:

In TurboTax online,

• Sign in to your account and select Pick up where you left off
• At the right upper corner, type in 1099r, then Enter
• Select Jump to 1099r
• Follow prompts
• Next screen, Choose your bank or brokerage, select I'll type it in myself
• Follow prompts.  On the screen "Tell us if any of these uncommon situations apply" 
• Check the box I need to prepare a substitute 1099-R and follow the prompts.  

You also complete the Foreign Tax Credit (Form 1116) interview in TurboTax in order to claim any credit due for foreign taxes paid. You will find the entry screens under Deduction & Credits, Estimates and Other Taxes Paid, Foreign Tax Credit.

See this TurboTax article for more information.

[j9gibb]

Your answer is a little confusing.  There is a place under Wages and Income to report "Canadian Registered Pension Income".  Why would I need to add a 1099R as you have indicated?  

[ThomasM125]

I believe you are referring to the foreign earned income and exclusion section where you entered your foreign income. That section is for entering foreign wage type income. You should enter your pension income as a form 1099-R entry, as mentioned by @MonikaK1 To apply for the credit for foreign taxes paid, you will use the Foreign Taxes menu option, under Estimates and Other Taxes Paid, which is in the Deductions and Credits section in TurboTax.

[Cutesy]

I'm confused, too.  I am in the same situation. 
One of the first Income questions is:  Are you a beneficiary of an RRSP?   I thought that meant, did I inherit an RRSP?  but I filled it out anyways because it asks for detail.  And, I completed the info (e.g. 10,000 total withdrawal and 7,500 taxable (which I don't understand) but then my total income tax owed went sky-high and I couldn't figure out how to tell TurboTax that Canada has already deducted 25% tax so I shouldn't be charged.  Then I changed the "taxable amount" to $0 but I know this can't be right...

[DaveF1006]

You may claim a foreign tax paid for the taxes you paid to Canada.  Here is how to claim.

To enter foreign taxes paid (for the Foreign Tax Credit), 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.  [Screenshot #1]
3. On the Foreign Tax Credit screen, click on the Yes box.
4. On the Before We Begin screen, click on the Yes box.
5. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
6. On the Choose the Income Type screen, mark the radio button next to General category income (since this is retirement income rather than investment income). 
7. Continue through the screens. 
8. On the Country Summary screen, if no countries are listed click Add a Country.  
9. On the Foreign Taxes Paid - [country] screen, enter the amount of foreign taxes you paid.   
10. You will be brought back to the Country Summary.  Click Done if you have no other countries to enter.
11. Continue through the rest of the [many] screens.
     

[srr]

You must be looking at older version of TT . TT 2024 premier has a differnt interview flow for 1116,  When I finish the INT and Dividends it does not let you enter a new category till you answer an AMT question. Then it does; i entered Canada as a country and it messed up the original foreign taxes paid RIC for dividends - it reduces those than before entering the RRSP income+tax paid for some reason.

BTW RRSP is an annuity and is passive income and so should be on the same 1116 form as INT and Dividends but I would have been okay to put it in the general category.

. Perhaps the way to do is to go to manual mode (ie form and not step-by-step)

Also in the wages and income part of the interview it has a special section for RRSP from Canada. This part of the interview does not ask about foreign taxes paid to canada as it should. I also went to the form where this is filled out and it does have an option to add foreign tax paid.

There is another bug wrt to RRSP for California (it has been reported and discussed in the TT Community). This bug is there since 2021. Here the interview asked about RRSP and then that part of the interview does not every comeback for you to make corrections. Intuit has not considered worthwhile to fix this reported but increased the price of TT Premier,

Intuit has screwed up

[MarilynG1]

Actually, step by step is better.  After the initial screens in the Foreign Tax Credit section (referring to INT/DIV),  you're asked a couple questions on using the simplified method.  Then you'll see a screen 'Completing Forms 1116,  and the next screen is where the various income types are listed.  

Here's more info on Claiming the Foreign Tax Credit.

@srr