Reporting canadian social security benefits

[ye4jim]

Hi, Did you ever get an answer to this?  Do they really withhold 25% tax? I thought as a Canadian living in USA all income reporting and taxing is done on my US tax return...

[twm50]

@ye4jimI believe you just report your net RRSP that is deposited to your US account in USD, same as if you were taking an IRA distribution. My step son is an accountant in CAN - I'll ask him next time we talk.

As far as the CP and OA - I just do a year end report on my checking acct to find the amts deposited in USD, add those to her SS and that's it. The person who said to add it as other income on the 1040 is wrong, based on what I have learned from other tax accountants. CP/OA is treated the same as SS so it has to go through the SS taxable amount calculations from the SS worksheet for 1040 line 6 - this takes into account the % of SS that is taxable and gets you from line 6a to 6b. The "other income" category ends up on line 8 and is not reduced in any way by the SS taxable amount rules - note that the CA tax paid may end up on line 10 as an adjustment. I definitely agree that turbotax is lacking in sufficient explanations for these situations.

[mbehrens45]

My husband receives Social Security benefits from Canada both regular and Old age pension. The advice received from IRS was to add up what was deposited to our bank account for the year and add that to our USA Social Security gross. Do not use the form they send as it is in Canadian dollars not US. We have been doing it this way for 13 years with no issues. M Behrens

[DaveF1006]

The amount to report to the US is reported in US dollars, not Canadian dollars.  The IRS was correct in its advice because the gross amounts deposited in your bank account is in US dollars. If you reported your Social Security distributions as Canadian dollars in the past, it may not have impacted your return significantly but going forward, it is best to rely on the advice the IRS has given you.

[Suzlo]

I am a US resident now receiving CPP Survivor Benefits.  Will I receive from Canada the equivalent of the Form SSA-1099 - Social Security Benefit Statement showing the total amount received in 2024, and how much was withheld in taxes?

[twm50]

My wife is originally from Canada and she does get a form from Canada via a download, but Canada does not withhold any taxes, nor do they report any amounts in US funds. You best option is to use the amounts deposited into your bank account, total that number and add to your US social security income for reporting as total SS. If you look back for some posts by me or TWM50, you’ll find more details.

[DaveF1006]

I agree with twm50 but like to add one additional detail. If the deposit is made into a Canadian account, you will need to convert the amount to US dollars to report on your US return. If Canada has a website like the US Social Security system has, you should be able to download a statement similar to a 1099 SSA or in your case,  a CPP.

If you receive this information from a download, you will need to convert to US dollars when reporting this in a US tax return. Here is a currency converter if you need it. In this converter, you can determine an average currency exchange rate for the entire year.

US/Canada Currency Converter

[twm50]

Ya, forgot about the exchange if it’s in CA$, my wife’s goes into our US acct so it’s easy to just add up. She also gets a bit of OldAge payments which has to get added in. The Canadian report is separate for each and neither converts to US$ on the form. 

[cjas]

This helps me greatly as my wife & I are both U.S. citizens on social security however years ago my wife worked in Canada for some time and now is receiving both U.S. social security and the CPP, also just found out she will be getting the OAS this year.  I had no idea how to do this in Turbotax and had input it under RRSP or RRIF. Now according to you I should report it as Other Reportable Income. You (DaveF1006) said, "For this, i would give this the description as Canadian CPP and OAS income and then the amount you received in your checking account.” Is this due to the exchange rate of Canadian dollars to U.S.? I note on her NR4 tax form the rate is in CAD which is a different amount than what was deposited into her banking account. So go with the amount deposited into her bank? Thanks for any and all assistance. Much appreciated.

[twm50]

You add the US$ amount from your deposits into your US bank acct to your SS - not regular income, not other income. No need to make any notes about the source. The reason is the retirement income, SS + CPP + OAS, is treated to special consideration where only a percentage is taxable. So if you enter it as regular income, you’ll miss out on the percentage that is excluded from being taxable. 

[mbehrens45]

Hi I called IRS when my husband started receiving OAS and Social Security from Canada. I was told to add the amounts deposited into our bank account (due to the exchange rate) and add that amount to his US Social security and report it together. Because it is Social security benefits not all is taxable. By reporting it on this line turbo tax is able to compute how much is taxable. I have been reporting it this way for 15 years and have never had a problem with IRS. Hope this helps.