I received a Canadian tax form NR4 with income code 43 which is a lump sum distribution of RRSP. Do i convert that into SSA-1099 or do I go the Form 1116 route for foreign tax credit or something else?
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You can enter the RRSP income as follows:
Don't forget to translate the income to USD.
To report the Canadian tax paid on your pension:
[Edited 03.27.19 | 3:29 pm]
Hi, when going to the Tax Credit (for taxes I paid in 2020 for this current tax year) > It asks if I have any credit to carry over from 2019 ? I select no and then it kicks me out? How do I claim a credit for the current tax year that paid taxes on?
You can only get the Foreign Tax Credit if you had foreign income and paid foreign taxes on that income. Be sure to enter the foreign source income and the foreign taxes paid before calculating the credit.
For example, if you paid foreign taxes on dividends you received:
Then, to calculate the credit for foreign taxes paid please follow these steps:
@djk80
@Irene2805 - Hi so I think the issue is that for the below information ::: When you go to Federal > Deductions and Credits. Foreign Taxes > Take a Credit > It only asks about credits paid on previous years (2019 being the latest when I'm filing for 2020) My income was paid through a RRSP , NR4 Code 43 (Where you can enter in a RRSP withdraw information has nothing about taxes being paid) The amount was withdrawn and taxes were automatically witheld during the RRSP withdraw in 2020 --- The "Take a Credit" option on foreign taxes has no option for the current tax year you are filing for only for previous years where you paid foreign taxes. I'm not sure how to indicate I paid foreign taxes for the current 2020 the year that I am filing for?
These steps are only for previous years where taxes were paid not the current tax year
Hi,
What is the definition of Total distribution and Taxable part of distribution?
Is total distribution the gross income or net? The NR4 only has 2 numbers: Gross income and Non-resident tax withheld. So what is the taxable part of distribution?
@kimras The 'Taxable Amount' is normally the same as the 'Gross Amount', which is also the 'Total Distribution' reported on your NR4.
You are taxed on the Gross Amount, but given a tax credit for tax you paid.
You can enter the Gross Amount as 'Other Income', and get a credit for tax you paid in the Foreign Tax Credit section under 'Deductions & Credits'. Choose the 'General Income' category in that section.
Click this link for more info on How to Report Other Income.
I have this exact situation for 2022. I received a lump sum distribution of my Canadian RRSP which the bank withheld taxes. As a result, I received an NR4 indicating the Gross Income in Box 16 & the taxes withheld in Box 17.
Do I still follow the same entries as detailed in this thread which is:
1) Under Wages & Income, enter the NR4 indicated in Box 16 (converted USD amount)
2) Under Deductions & Credits, then Estimates and Other Taxes Paid, enter the NR4 indicated in Box 17 (converted USD amount)
Am I paying taxes twice - Canada & USA?
Yes, that is correct. The US tax is calculated on the foreign source income and you are geting a credit for the foreign taxes you paid to Canada so in essence you are "NOT" paying the taxes twice.
Total Distribution is the actual total amount of the RRSP distribution.
Taxable Part of Distribution is the taxable amount of the RRSP distribution using Pro-Rata rule depending on your cost base calculation:
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